US coal exports surge 20.3% YOY in Q1 2023

US coal exports in the first quarter of 2023 rose 20.3% year over year, according to S&P Global Market Intelligence data.

The US shipped 22.6 million metric tons (MMt) of coal abroad in the first quarter of 2023, up from 19.3 MMt in the prior quarter and 18.8 MMt in the same period a year ago.

Export markets have offered an outlet for US coal producers, who have seen a steady trend of retiring coal-fired power plants erode domestic demand.

Prices for export coal from the US have softened in recent weeks, however. "Tight markets in Europe have flipped into surpluses, mirroring those in the US in the wake of a mild winter and spring," Steve Piper, director of energy research for S&P Global Commodity Insights, said in a June 5 report. "Led by the continued easing of global natural gas prices, coal price declines during May were more severe for US export coal, although domestic coal declined as well."

India continues to be a top buyer of US export coal, and shipments to the country swelled to 5.1 MMt in the first quarter, up 40.9% year over year and up 43.9% from the fourth quarter of 2022, according to Market Intelligence data.

Miteshkumar Thakkar, Consol Energy Inc. president and CFO, noted on the Pennsylvania-based thermal coal producers' first-quarter earnings call that much of the company's sales contract volume was signed with buyers in the Indian industrial market through 2026. Thakkar said the company expects that particular market "to expand substantially in the coming decade."

China imported 1.6 MMt of US coal in the first quarter, a 206.8% year-on-year jump.

Other countries notching large percentage gains in US coal purchases included Belgium, Austria, France, Brazil, Poland, Canada, Germany and Egypt.

Countries pulling back on their US coal imports in the quarter included Japan, South Korea, Morocco, Croatia, the UK, Spain and Turkey.

Most of the coal shipped out of the US leaves the country through ports in Norfolk, Va.; Baltimore; New Orleans; Mobile, Ala.; or Seattle.

First-quarter coal exports from Baltimore, the second-largest port by coal volume, rose 59.1% year on year to 6.4 MMt, with the bulk of shipments destined for countries in Asia.

Metallurgical coal shipments out of Baltimore increased by 39.0% year over year, and shipments of other coal increased by 73.4%.

Norfolk, the nation's largest port by coal shipment volume, sent cargoes largely to buyers in Europe, followed by Asia.

By volume, most of the coal leaving Norfolk is metallurgical-grade coal, used to make steel. The port's metallurgical coal shipments were flat year over year in the first quarter, while exports of coal for other uses, including thermal coal, rose by 126.5%.

In its most recent "Short-Term Energy Outlook," the US Energy Information Administration reported 84.8 million short tons of coal exports in 2022. The agency forecast that coal exports would rise 18.9% to 100.8 million short tons in 2023, before rising further to 103.4 million tons in 2024.

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