Coalproducers, utilities and railroads agreed to unite in finance decisions,contracting and transportation to achieve recovery in 2020, according to a May5 "2020 View" panel discussion held at the Eastern Fuel BuyersConference in Orlando, Fla., S&P Global Platts reported.
"We'regood at predictability, but that's not the market reality," Platts quotedDavid Lawson as saying, one of the panelists and the vice president for coal atVirginia-based Norfolk Southern Corp.
Accordingto David Owens, vice president for coal and gas services at , thecompany's coal demand posted a dramatic collapse to the low 20 million tonsrange compared to an average 45 million tons in recent years.
TVAalso projects coal to only satisfy 20% of its generation needs in 2020, fallingfrom 50%, said the report.
Accordingto Alliance Resource Partners LPSenior Vice President Tim Whelan, producers need "to have a portfolio ofassets to pull from and a range of quality coals" to achieve flexibilityand optionality in contracting. "There needs to be a transparent model,"the report quoted Whelan as saying.
Healso mentioned producers' need for more control over supply contracts butunderscored access to capital as the key.
JeremySussman, managing director of metals and mining for London-based ,said he was more bullish about the domestic coal sector compared to theinternational side. "Production in the US is down a third year to date,which is more than anyone expected," the report quoted him as saying.
Sussmansaid the recent slashing of production is attributable to creditors and privateequity funds who are now becoming owners of coal producers, noting that theycut tons faster than publicly owned companies. "We'll get toa point where companies are a lot healthier, but it's going to take a long timeto get there," Platts quoted him as saying.
Platts is owned by S&PGlobal Inc.