S&P Global Platts Analytics improved its 2021 forecast for Illinois Basin and Northern Appalachian coal production by 5 million st and 7 million st, respectively, following jumps in output in the first quarter, a report released May 13 said.
IB coal is now expected to total 75 million st and NAPP 90 million st this year.
These increases are due to stronger demand (domestic and export) as well as improved selling prices incentivizing the increased output," Platts Analytics said.
On the domestic side, buyers have been replenishing stockpile given increased demand, which has continued through May.
In the seaborne market, export buyers have dealt with tight spot market availability globally, driving up demand for US coal.
Platts Analytics projections have improved given "significant recovery" shown in the first quarter. While IB production jumped 22% quarter on quarter to approximately 20.1 million st, NAPP output rose 19% to 24.3 million st.
"Both regions have exhibited similar price recovery trends, recovering to price levels last seen in Q3/Q4 2019, which we believe has incentivized increased coal production volumes," Platts Analytics said.
Total US thermal coal demand continues to outpace year-ago levels, the report said, remaining at about 35%-37% of total gas and thermal generation. Platts Analytics expects this trend to continue throughout 2021 despite some weakening in the natural gas Henry Hub forwards curve.
