As Coal Use Wanes, U.S. Miners Depend on Foreign Buyers, Steel – by Joe Ryan (Bloomberg News – March 7, 2018)

It keeps getting harder to sell coal in the U.S. U.S. miners are forecast to cut production 4.7 percent in 2018 as electricity generators shift increasingly to natural gas and renewable energy, according to the U.S. Energy Information Administration.

The expected total of 736.3 million short tons would be the second-lowest since 1978, and just barely more than 2016, a year filled with mine closures, mass firings and bankruptcies.

As demand for coal used to generate electricity continues to dwindle, the key to success for U.S. miners increasingly lies in two things: steel and international markets.

Companies that have access to overseas markets and mine metallurgical — or “met” — coal that’s used in steelmaking are performing well. Those who sell exclusively to U.S. power generators aren’t.

“It’s the export story, and it’s the met story,” Mike Dudas, an analyst for Vertical Research Partners LLC, said in an interview. The dichotomy has been clear as miners reported fourth-quarter earnings. Companies including Arch Coal Inc. and Peabody Energy Corp. that mine metallurgical coal and have overseas customers beat analysts’ expectations and have seen their shares rise

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