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Adding to domestic sector stress, recent weakness in export markets has further exacerbated coal producers’ problems as tons that were going abroad try to wedge back into the U.S. market.
Despite drastic cuts in production, U.S. domestic thermal coal markets could continue to face oversupply for the foreseeable future as about a quarter of U.S. coal production is bound for power plants where customers have already set a future retirement date.
An S&P Global Market Intelligence analysis showed that nine coal basins across the U.S. produced about 683.5 million tons of coal in 2019. Of that, producers delivered 174.3 million tons to power plants that have already set retirement dates.
Asked about the future of the railroad company’s coal business, Kenny Rocker, Union Pacific Corp.’s executive vice president of marketing and sales, said on a July 29 earnings call that the company’s coal business is likely to “continue to leak” over time.
“We’re going to have challenges here in the near term and long term,” Rocker said. “It’s in structural decline.”
For the rest of this article: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-coal-miners-options-fading-fast-as-planned-retirements-narrow-customer-base-59750878