US coal to grow this year: NMA

FEW signs of a cooling US economy will show up in the nation’s mines this year with 2007 coal production expected to set a record for the third consecutive year, according to the National Mining Association’s annual economic forecast.
US coal to grow this year: NMA US coal to grow this year: NMA US coal to grow this year: NMA US coal to grow this year: NMA US coal to grow this year: NMA

Courtesy Union Pacific.

Angie Tomlinson

NMA said America’s power plants will continue to rely on coal to generate more than half of the nation’s electricity.

“These headline figures underscore the undeniable importance of both coal and mineral mining to the US economy and the continued vitality of our industry in a global market for energy and commodities,” NMA president Kraig R Naasz said.

“This trend also reminds us of the consequences that are likely to arise from arbitrary restrictions on the production of US coal and minerals.”

US mines are expected to produce 1.17 billion tons of coal in 2007, exceeding the previous record of 1.16 billion tons set last year.

NMA projected coal would maintain a 50.5% share of the electricity generation market that is expected to grow by 1.5% in 2007 with normal weather patterns.

NMA, which bases its coal forecasts on direct reports from member companies responsible for the overwhelming majority of US coal production, said companies in the Powder River Basin (PRB), the nation’s largest coal producing region, are already expected to ship more coal in 2007 than they produced last year.

A 2.4% increase in western production, including the PRB production, is forecast largely owing to improved rail transport and will offset a slight decline in production from Midwest and Appalachian coal mines.

Coal utilisation plus exports are expected to reach 1.19 billion tons in 2007, nearly 20 million tons above the 2006 mark of 1.169 billion tons. When inventory increases are added to actual coal use this year, total US coal demand will climb above 1.2 billion tons, exceeding by 1.8% the record for total demand set last year.

Power plants increased their coal inventories last year to levels higher than at any time since 1999. But NMA anticipates still more inventory build-up in 2007, as utilities insulate themselves against unforeseen logistical problems and higher than anticipated burn rates.

While still accounting for a small percentage of US coal use, coal imports, primarily from Colombia, will continue to climb this year, owing largely to improvements made in US port facilities, said NMA.

Exports of US coal are likely to decline in 2007 by nearly 1Mt, according to association economists.

Coking coal used in steel production is expected to decline by 500,000t this year owing to a slight decline foreseen in US and global steel production, NMA forecast. This latter is triggered largely by falling automobile manufacturing in the US and a slower rate of construction growth in the developing world.

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