In a recent update, the US Energy Information Administration (EIA) has revised its 2024 coal export projection, anticipating a decrease to 91 million short tons (st). If this projection holds, it would signify a 9% drop from the 2023 export figure of 100 million st.
The January Short-Term Energy Outlook by the EIA reflects a 2.7% downward adjustment for 2024 projected coal exports compared to the previous month. Projections for 2025, however, show a potential recovery, with coal exports expected to increase by 4.8% to reach 95.4 million st.
The EIA’s outlook is indicative of a broader trend of diminishing coal demand, as evidenced by the 2024 US coal production estimate, which marks an all-time low. The EIA predicts a 15.9% year-on-year decline in coal production to 489.3 million st in 2024, followed by another 12.4% decrease to 428.8 million st in 2025.
Total coal consumption is anticipated to reach 391.3 million st in 2024, reflecting a 1.6% increase from the previous month’s projection. Looking ahead to 2025, the EIA estimates total coal consumption to be 361.7 million st. Specifically for the electric power sector, coal consumption is expected to decline by 8.4% to 351.9 million st in 2024 and reach an all-time low of 322.2 million st in 2025, according to EIA data dating back to 1997.
Nominal average delivered coal prices are projected to be $2.49/MMBtu in 2024, a slight decrease from $2.52/MMBtu in 2023. The EIA foresees further contraction in 2025, with average delivered coal prices expected to be $2.44/MMBtu.
Market assessments reveal that US Central Appalachia 12,500 Btu/lb CSX rail coal for February delivery held steady at $72.40/st on January 8, according to S&P Global Commodity Insights. In contrast, Powder River Basin 8,800 Btu/lb rail coal for prompt-month delivery remained unchanged at $13.95/st on the same day.
In tandem with the decline in coal consumption, the EIA predicts a decrease in coal’s share of US power generation, slipping to 14.8% in 2024 from 16.6% in 2023. Projections for 2025 indicate a further decline to 13.3% as renewable energy generation continues to increase.
Renewable energy sources accounted for 21.8% of the US generation share in 2023 and are projected to rise to 24% in 2024 and 25.9% in 2025. Nuclear generation is expected to maintain a steady share between 19.2% and 19.3% from 2024 to 2025. Meanwhile, natural gas generation, constituting 41.9% of the US generation share in 2023, is anticipated to decrease to 41.5% in 2024 and 41.1% in 2025.
Shifting focus to natural gas, the EIA estimates the Henry Hub spot price to average $2.76/MMBtu in 2024, a decline from the December 2024 estimate of $2.90/MMBtu. Projections for 2025 place Henry Hub prices at $3.06/MMBtu.
Dry natural gas production is expected to increase to 105.04 Bcf/day in 2024, up from 103.54 Bcf/day in 2023, with further growth anticipated to 106.38 Bcf/day in 2025. LNG exports are projected to rise by 4.4% to 12.36 Bcf/day in 2024 and experience a 16.7% YoY increase to 14.42 Bcf/day in 2025.
Total natural gas consumption is expected to reach 89.91 Bcf/day in 2024, a 1.1% increase year-on-year, while projections for 2025 foresee a slight decline to 89.71 Bcf/day. Natural gas consumption in the US power sector is projected to rise by 1.1% to 35.54 Bcf/day in 2024 and then decrease by 0.7% to 35.29 Bcf/day in 2025, according to the EIA estimates.