"Exports of Illinois Basin coal from the US Gulf Coast and Northern Appalachian coal exports through Baltimore have both slowed considerably from levels seen this summer," Platts Analytics wrote, with October exports down 2 million mt year on year and down about 200,000 mt from September.
Platts Analytics forecast a drop of 13 million mt exports year over year in 2019 to 36 million mt, while 2020 exports are projected to be just over 30 million mt "as US coal netbacks are not attractive to producers."
"Contracted exports to Asia should continue in CY20, and Illinois Basin producer Foresight Energy may continue exporting (albeit at lower levels than in CY19) as the miner has the lowest bituminous coal cost structure in the US," the report said. "Few additional thermal coal exports should flow."
This year Foresight said in its third quarter earnings it expects to sell about 6 million st into the international market.
Platts Analytics also noted a ban on coal exports being mulled over by Richmond, California, a key destination for shipments of US coal from Utah to Northeast Asian markets.
The ban could cut approximately 3.6 million mt of thermal exports.
In 2019, the US exported about 7 million mt of thermal coal to Asia through 10 months of the year, with nearly 3.7 million mt going to South Korea and over 3.4 million mt being imported by Japan. Compared with the same period last year, US exports to Asia were down 24.1%, largely driven by a 28.9% drop in South Korean imports.
The declining US thermal exports should limit any rise in US coal prices next year, Platts Analytics wrote, "barring swift and significant cuts in production."
