U.S. Coal Exports to Germany May See Boost

The German government recently decided to increase electricity generation from coal-fired power plants in response to European sanctions against Russia.

Russia reduced its exports of natural gas to Germany in response to the sanctions.

An analysis published on the website of Trains magazine said the move opens opportunities for coal traffic from U.S. railroads that serve export terminals shipping coal to Europe.

The German move is designed to enable the country to conserve its existing natural gas ahead of next winter.

In recent years the United States has been the second largest supplier of coal to Germany, trailing Russia.

However, among the sanctions that European governments have leveled against Russia is a ban on Russian coal.

The article can be read at https://www.trains.com/trn/news-reviews/news-wire/u-s-coal-export-outlook-remains-strong-as-germany-looks-to-burn-more-coal-analysis/

Coal Exports Seen as Likely to Rise in 2022

Coal exports for steelmaking are expected to be strong in 2022, Trains magazine reported this past week in an analysis posted on its website.

Steel makers use metallurgical coal and the U.S. Energy Information Administration projects that export demand for that coal will increase 16 percent this year with the leading buyers being located in Brazil, India and China.

Exports to China were up sharply last year, which accounted for an estimated 26 percent of the 87 million short tons of export coal. Of that 47 million short tons was metallurgical coal.

EIA forecasts predict U.S. coal exports this year will be 50 million short tons this year and potentially 55 million short tons in 2023.

Most export metallurgical coal is hauled by CSX and Norfolk Southern through ports in the Virginia Tidewater region.

For more information, see https://www.trains.com/trn/news-reviews/news-wire/overseas-demand-for-metallurgical-coal-likely-to-bolster-u-s-coal-carloadings-in-2022-analysis/

U.S. Coal Benefits from China-Australia Rift

A rift between Australia and China has benefited U.S. coal companies, Trains magazine recently reported on its website.

China stopped buying coal from Australia after top government officials there were critical of China’s handling of the COVID-19 outbreak.

The Trains article noted China is heavily dependent on imported coal for steel making and power generation.

The U.S. Energy Information Administration found the United States has exported 5.4 million tons of coal to China in the first six months of this year, a 920 percent increase over exports in the same period in 2020.

The article can be read at https://www.trains.com/trn/news-reviews/news-wire/analysis-chinas-ban-on-australian-coal-is-benefiting-u-s-railroads/

Export Coal Markets Are Falling

In the facing of declines in the domestic coal market, U.S. railroads had made up some of the slack with export coal.

In 2017, the amount of coal exported from the United States rose by 61 percent.

But that market now is in decline due to lower natural gas prices an analysis released by investment bank Morgan Stanley has found.

The report said coal exports are expected to fall by 15 percent this year.
Not only are natural gas prices falling, but shipping of liquefied natural gas has also increased.

In the meantime, banks, other lenders, and insurance companies are no longer supporting the coal industry as they once did with more than 100 of those institutions have withdrawn from the market since 2013 said a report by the Institute for Energy Economics and Financial Analysis.

The Morgan Stanley analysis said that financial institutions have cited climate issues for reducing their investment in coal companies.

“The globalization of natural gas is set to usher in a new energy transition,” said the Morgan Stanley report. “A wave of investment in LNG, which can be easily transported, is unleashing this cheap energy resource and creating a new global commodity market.”

The Association of American Railroads said that U.S. and Canadian carloads of coal averaged about 7 million annually between 2009 and 201.

In the past three years, that has fallen to 5.25 million in 2015 and 4.5 million between 2016 and 2018.

Norfolk Southern and CSX both noted falling coal exports in their second quarter financial reports.

Reports indicate that it coal exports have fall to Europe and Asia.

Some Asian nations had in recent years seen increased demand for steam coal from 10 million short tons in 2016 to 20 million tons in 2017.

But during the first five months of 2019, Asian markets have reduced their coal purchases by 11.5 percent to Indiana, 31.6 percent to South Korea and 66 percent to China.