Coal news and updates

US coal producers cannot ramp up to feed Russia’s European customers

The global coal market cannot scale up to supply Russia’s European customers, top coal producers said recently, which is reflected in coal prices and may hasten coal-fired generation retirements, especially in light of federal plans that would discourage coal burning.

Since Russia invaded Ukraine Feb. 24, the Platts assessed normalized coal price, FOB Baltimore, has averaged about $178.75/mt, including a high of $240.70/mt on March 8-9, according to S&P Global Commodity Insights. The Platts assessment, since April 2018, has averaged $64.55/mt through the end of 2021, with a high of less than $146/mt Oct. 6-7, 2021.

‘’The international market is about 1.2 billion [metric tons] a year, and that includes all types of quality of coal,” said Paul Vining, board chairman at Westmoreland Mining, the oldest independent coal company in the US, based in Colorado Springs, Colorado. “Out of 1.2 billion, Russia is about 240 or 250 million [mt], so it’s about 20% or so of that.”

China and India may increase their demand for Russian coal, and some smaller coal consumers may increase their demand, Vining said during a March 10 panel discussion at CERAWeek by S&P Global in Houston. However, the international coal market could still be at least 120 million mt short of its typical demand, both in terms of metallurgical and thermal coal, “where the elasticity in this industry has all but disappeared.”