US Coal Consumption Forecast

U.S. Coal Consumption. Coal consumption in the electric power sector rose by 5 percent in the first half of this year compared with the first half of last year, primarily the result of higher electricity consumption. EIA forecasts that higher electric power sector coal consumption will continue for the remainder of the year, with the total annual increase projected at nearly 7 percent. Despite a very slight decrease (0.3 percent) in electricity consumption in 2011, projected coal-fired electricity generation and related coal consumption will decline at a higher rate, primarily because of forecast increases in nuclear and renewable-based generation (U.S. Coal Consumption Growth Chart).

U.S. Coal Supply. Coal production for the first 6 months of 2010 fell by 3 percent despite a 5 percent increase in U.S. coal consumption. Drawdowns in inventories (U.S. Electric Power Sector Coal Stocks Chart) are forecasted to meet the majority of the increased coal consumption in 2010. Projected coal production increases in the second half of 2010, with annual growth projected at 1 percent. EIA projects another 1-percent increase in coal production in 2011 (U.S. Annual Coal Production Chart).

U.S. Coal Trade. The United States is a net exporter of coal, averaging 3.4 percent of production in 2009. Projected coal net exports increase by 58 percent in 2010, then decline by 17 percent in 2011. Metallurgical coal exports have nearly doubled in the first half of 2010 compared with the first half of last year. Metallurgical coal's share of total coal exports has grown from 52 percent in 2008 to a projected 74 percent in 2010. EIA projects coal imports to decline by 17 percent in 2010 recover next year with growth of 37 percent. However, the annual import tonnage (26 million short tons) remains significantly below the 2005-through-2008 average of 34 million short tons.

U.S. Coal Prices. The electric-power-sector coal price rose by 1.3 percent in the first half of 2010 compared with the first half of last year. This higher cost of delivered coal reflects the effect of longer-term power sector coal contracts initiated during a period of high prices, rising transportation costs, increased consumption, and increases in spot coal prices. The projected electric-power-sector delivered coal price averages $2.26 per MMBtu in 2010, and then declines to an average of $2.23 per MMBtu in 2011.