The OPEC+ group is sticking…
All eyes are now on…
U.S. coal miners are enjoying the surge in demand for the fossil fuel, with almost all of their production through the end of next year—and some into 2023 even—already sold, according to a Bloomberg report.
Prices are higher, too. According to the report, Arch Resources, the second-largest coal miner in the United States, has sold its 2022 output at prices 20 percent above current spot market rates. This suggests that this year’s surge in coal demand may not be just a short-lived hiccup in the energy transition.
Share prices of coal miners are also rising amid the demand surge. Peabody Energy Corp., America’s largest coal miner, saw its stock gain 17 percent within a day earlier this month.
U.S. coal-fired electricity generation is expected to increase this year for the first time since 2014, after years of decline, according to information published by the Energy Information Administration. The increase from 2020 is seen at a hefty 21 percent. Yet this will be a short-lived trend as the EIA also noted that as much as 30 percent of coal-fired power plants have been retired since 2010 and no new plants have been built since 2013 as the country shifts towards low-carbon energy generation.
Yet demand for coal from other parts of the world, namely Asia, is likely to remain strong in the coming years, opening up export opportunities. China is building new coal plants at a fast rate, and India continues to rely on coal for 70 percent of its electricity generation.
Meanwhile, however, coal stocks in the United States are shrinking. Down by 13.2 percent in August from a month earlier, coal stockpiles stood at 84 million tons, according to the Energy Information Administration. This is the lowest August total since 2001 when records of this nature began.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.