While Europe continued to dominate in 2011 as the top coal export customer for U.S. producers, exports to rapidly-expanding economies in Asia jumped during the period, said the June 19 edition of the U.S. Energy Information Administration’s “Today in Energy” feature.
Coal exports to European and Asian markets represented 76% of total U.S. coal exports in 2011. While European markets usually take a big portion of U.S. coal exports, the share of coal exported to Asian markets is up since 2009 because of growth in sales to South Korea, China and India, EIA noted. In 2011, total annual coal exports were up 31% compared to 2010, reaching 107 million tons, due largely to rising exports to Europe and Asia.
Coal exports come in two forms: metallurgical coal, which can be used for steel production, and steam coal for electricity generation. Met coal dominated U.S. coal exports in 2011, coming in at roughly 70 million tons compared to about 38 million tons for steam coal. Demand was high for met coal in European, Asian and South American markets.
The U.S. has some of the best-quality met coals in the world, particularly out of a few counties in Central Appalachia in southern West Virginia and southwest Virginia. The U.S. is often the go-to destination for met coals during high demand periods, but relatively high costs mean this coal is among the first of the international coals to feel a market slump. Several U.S. coal producers have sharply cut steam coal output lately due to slack domestic demand, but are still seeing relatively strong export markets for both steam and met coals.
Exports in 2011 broke down as:
- Europe – The Netherlands (11 million tons) and United Kingdom (7 million tons) ranked in the top 10 destinations for both U.S. met coal exports and steam coal exports. Germany (5 million tons), France (4 million tons), and Belgium (3 million tons) ranked among the top 10 U.S. steam coal destinations, while Italy (6 million tons) and Ukraine (5 million tons) ranked among the top 10 U.S. met coal destinations.
- Asia – South Korea (10 million tons) ranked in the top 10 destinations for both U.S. met and steam coal exports. In fact, South Korea ranked first for U.S. steam coal destinations. Japan (7 million tons), China (6 million tons), and India (5 million tons) ranked 3rd, 6th, and 9th, respectively, in the top 10 destinations for U.S. met coal exports.
- South America – Brazil (9 million tons) ranked number 1 for U.S. met coal destinations, and Chile (2 million tons) appeared on the list of top 10 U.S. steam coal destinations. Brazil is particularly a rapidly-expanding producer of iron ore, which is combined with coal-based coke to produce steel.
- North America – Steam coal exports to Canada and Mexico accounted for 12% of total steam coal exports in 2011. Canada also received 6% of total U.S. met coal exports.
- Africa – Morocco ranked 6th in the top 10 destinations for U.S. steam coal exports with 3 million tons.
Several major factors contributed to the rise of U.S. coal exports in 2011, EIA pointed out. U.S. coal exports helped to meet rising Asian demand and provided coal for other emerging markets. Falling domestic coal consumption (down 4.6% in 2011) along with a slight increase in U.S. coal production (0.9%) freed up more coal for the export market. A series of international coal supply disruptions in 2011 in traditional supply areas such as Australia, Indonesia and Colombia meant that Asian countries needed to secure coal supplies from alternative markets. Rising spot natural gas prices in Europe, up about 35% in 2011, prompted European electricity generators to use more coal, EIA pointed out. That was the opposite of the U.S., where slumping gas prices last year and earlier this year slashed steam coal consumption by U.S. power generators.