Home / Top News / US coal exports are surging under Trump, but it probably won’t last

US coal exports are surging under Trump, but it probably won’t last

U.S. coal exports are rising this year, giving the fossil-fuel friendly Trump administration reason to cheer, but analysts believe the good times won’t last.

The surge in exports doesn’t herald a reversal of coal’s fortunes, but a temporary blip to be expected every few years, according to experts. The latest spike is due to a temporary rise in coal prices that is opening a window of opportunity for miners.

Coal exports were up 58 percent in the first quarter from the same period last year, but analysts say the long-term trend is down.

“I don’t think 2017 will be a typical year, but it might be a typical every fourth or fifth year. We’ll get these strong years and we’ll get these years of lower exports in between,” said James Stevenson, senior director for IHS Markit’s global coal practice.

The U.S. Energy Information Administration forecasts growth in coal exports will moderate in the coming months. Total exports are on pace to rise about 20 percent this year from 2016.

The lumpy nature of U.S. coal exports illustrates the challenge President Donald Trump faces in delivering one of his core campaign promises: reviving an ailing coal industry and putting miners back to work. As cheap natural gas and policies that favor renewable energy erode coal’s share of U.S. electricity generation, the White House has looked overseas for growth opportunities.

The Trump administration recently helped broker a deal to ship 700,000 tons of thermal coal from mines owned by Pennsylvania-based Xcoal Energy to Ukrainian state-owned power generator Centrenergo PJSC. Ukraine cannot access much of its domestic supply because of an ongoing conflict with rebels who control its coal-producing region.

To be sure, the United States is a dominant exporter of metallurgical coal — the type used in industrial processes like steelmaking — but it plays a much smaller role in trading thermal coal, which supplies power plants.

Thermal coal accounts for most of the current spike. It surged from about 4 million short tons in the first quarter of 2016 to more than 10 million short tons in the first three months of this year.

The international market for thermal coal is split down the globe. Australia and Indonesia dominate trade in the Pacific basin, where China, India, Japan and South Korea are the biggest buyers. Colombia and South Africa outmatch the United States in the Atlantic basin, which includes the European, African, Latin American and Middle Eastern markets.

Straddling Asia and Europe, Russia exported about four times as much thermal coal as the United States shipped in 2014. American miners essentially mop up the remaining demand for thermal coal, though they do steady business with some foreign buyers.

About admin

Check Also

39% of younger millennials say Covid-19 has them moving back home

Nearly 3 out of 4 younger millennials are concerned that the coronavirus pandemic will impact …