Falling US thermal coal exports to put pressure on domestic utility market and lower-grade met prices: Seaport

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US thermal coal exports are expected to fall as much as 12% in 2019 and 25% in 2020 given the declining Northern European delivered price, which will put pressure on the US utility and lower-grade US metallurgical prices, Seaport Global analysts wrote Monday.

The price level for healthy US exporters, Seaport senior analyst Mark Levin and senior associate analyst Nathan Martin wrote, is between $80/mt and $90/mt, based off the API2 price, with $75/mt as the lower limit to keep exports afloat.

On Friday, the analysts noted an API2 price of $74/mt.

Approximately 54 million mt was exported into Europe and Asia when the front-month price averaged $92/mt for the year, compared with exports averaging 35 million mt in the preceding five years when the price averaged $72/mt.

“Some of the factors (plus others) are at play in Asia, where there currently appears to be a surplus of coal,” they added….

An excerpt from S&P Global