The “Can railroads meet summer US coal demand?” report says that in addition to the issue of having stockpiles depleted during the previous harsh winter in North America, coal companies are attempting to deal with a rail network unable to increase the rate of deliveries beyond 2013 levels.

The report said there was a high probability that coal-producing units relying on western coal would not be able to ramp up output despite higher demand.

US Energy Information Administration data confirmed the study’s findings, showing that coal inventories in February were down 32% compared to the previous year, while spot prices were up.

Rail congestion prevented producers from capitalising on the higher spot prices as companies were unable to take orders they knew they could not deliver.

The issues were caused by the harsh winter weather that delayed shipments from US producers, generating a major backlog of orders.

During which time, demand for rail cars rose, prompted by a shorter grain harvest and rising domestic oil production.

The experts expect tighter markets to place even more upward pressure on gas prices, further increasing the desire for coal this summer.

“Low stockpiles, constrained rail deliveries and lower production levels are having the strongest influence on coal demand from units relying on coal from the Powder River Basin,” Wood Mackenzie said.