April 25, 2012

U.S. coal consumption fell while exports increased during the fourth quarter of 2011

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Domestic coal consumption during the fourth quarter of 2011 decreased by 18.8% from the third quarter of 2011 to 227.1 million short tons, which was the lowest level since the second quarter of 1995. This decrease was primarily the result of lower consumption in the electric power sector. However, declines in domestic coal use were partially offset by rising coal exports to Asia and Europe (see chart above).

Electric power sector consumption decreased to 208.6 million short tons as a result of mild weather along with high stockpile levels and strong competition from natural gas in November and December 2011.

Total coal exports surpassed the five-year (2006-2010) fourth-quarter range, increasing by 32.6% from fourth quarter 2010 and 6.6% from the third quarter of 2011, to 27.7 million short tons. U.S. coal exports were up in 2011 as a result of supply disruptions in Australia, Indonesia, and Colombia in late 2010 and early 2011 and strong demand growth in Asia.

Exports to South Korea, Japan, China, and India together accounted for approximately one-fourth of all coal exports in the fourth quarter of 2011. Accelerated demand by China, to support economic growth, and by Japan, for electricity generation and steel manufacturing following the Fukushima Daiichi nuclear accident, prompted other Asian nations to purchase coal to maintain stockpiles.

U.S. exports to Europe in the fourth quarter of 2011 increased both quarter-over-quarter and from the fourth quarter of 2010. Several factors may have increased U.S. exports to Europe in 2011:

• South Africa shifted steam coal exports from Europe to Asia
• Russia and Columbia had limited spare coal export capacity available to meet European demand

Exports of metallurgical coal—used in steelmaking—accounted for 65% of coal exports in the fourth quarter of 2011: 18.0 million short tons with an average price of $181.41. Exports to key Asian markets (South Korea, Japan, and India) increased to 3.9 million short tons in the fourth quarter of 2011. Fourth-quarter exports to China (1.3 million short tons) grew 28.4% from the third quarter of 2011, but remained about the same as the export level in the fourth quarter of 2010. Metallurgical coal exports to Italy (1.1 million short tons) and Ukraine (1.3 million short tons) also grew appreciably from the fourth quarter of 2010.

Steam coal exports increased by 27.0% from the fourth quarter of 2010 to 9.6 million short tons. Exports to the United Kingdom (1.2 million short tons) and South Korea (0.9 million short tons), which together accounted for 22.4% of total steam coal exports, were followed by lower levels to Germany, the Netherlands (a major trans-shipment port), and Belgium.

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