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Half of US total coal exports destined for Europe - EIA

16 Nov 2012 18:48:26 | csd

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US coal exports have grown steadily in the past year, with 75% of the country's total during the first eight months of 2012 shipped to Europe and Asia.

However, although Asia is the world's largest coal-consuming region, the US dispatched 42m tonnes (or 51% of its total exports) to Europe between 1 January and 31 August, the US Energy Information Agency (EIA) said on Friday.

Meanwhile, Asia received around 23m tonnes, followed by South and Central America at 6m tonnes, the Middle East at 5m tonnes and Africa at 3m tonnes. Around 4m tonnes of coal was used domestically.

US exports to Europe are split evenly between thermal and coking coal, while Asia imports mainly US coking coal.

US coal exports to Europe were primarily shipped out of east-coast ports via Norfolk in Virginia and Baltimore in Maryland, EIA said.

US exports to Asia also originate mostly from America's east coast, mainly because those ports are close to US metallurgical coal mines, which are concentrated in the country's eastern region.

EIA added that, while coking coal accounts for the majority of US coal exports, growing thermal coal demand - a result of the rising natural gas prices in Europe - is likely to push 2012 total coal exports to an all-time high.

The profitability of coal-fired generation has been exceptionally good for the majority of this year, increasing coal burn and keeping European coal demand high.

For example, in the second quarter, UK coal generation was up by 60% year on year, or 11TWh, because of historically high profit margins in comparison to those of gas-fired plants. Coal generation was at its highest second-quarter level for at least 14 years (see CSD 14 November 2012).

ICIS data show the UK December '12 clean dark spread settled at £20.69/MWh on Thursday, whereas the equivalent clean spark spread stood at £0.59/MWh.

EIA has previously said that US coal production is expected to fall by 7% year on year to 926m tonnes in 2012 because of reduced domestic consumption, high coal inventories and low prices, which are likely to result in shut-downs of higher-cost production.

However, US coal exports will remain strong, exceeding the 97m tonnes exported in 2011. Total US coal exports are expected to reach a record of about 125m tonnes, far surpassing the previous record, 113m tonnes in 1981 (see CSD 7 November 2012). MV

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