Coal exports surge to highest levels in two decades

by Tom Carlson | Tuesday, Apr 10, 2012 | 377 views

Coal exports reached new highs as the mark reached their highest of the last two decades given strong demands from markets in Asia and Europe . These markets served as an outlet to the fuel which was falling out of favor in the home market.

The data from U.S Department of Energy  reveal that the exports of the fuel  reached 107 million tons in 2011 which is worth $16 billion . The level is the highest since 1991 and double the volume of exports in 2006.

The renewed interest in this fuel has been embarked by the power-hungry Asian markets where the rapid development has ignited a “global coal super cycle” .

The analysis by the Associated Press shows that the export to South Korea  jumped by 81 % to almost 10 million tons while that to India leapt  by sharp 65 % to 4.5 million tons . Japan , having hit by earthquake and tsunami driven meltdown of the nuclear reactor of Fukushima Plant , has sought back to coal based energy . The exports to Japan saw a 119 percent increase to 7 million tons .

With competition form cheaper natural gas and strict and costlier guidelines for power plants , Coal is facing a tough scenario in U.S . The share of power generation from coal has fallen down by almost 20 % in the last few years which has forced coal companies to look for new customers or to cut down on production , having produced 1.1 billion tons annually .

The domestic sector demand for energy from coal is set to decrease by another 10 % in the coming year according to the government.

The Energy Department also reported that the exports to countries like China and Brazil beside several other European countries for making steel  has also increased dramatically. The exports are expected to decline over the next two years , thereafter reaching back to the levels of 130 million tons annually. On the other hand Arch Coal Inc. has predicted that the sales will continue to grow and could touch a level of 245 million tons by 2015 itself.

The industry does face challenge from other exporting economies like Australia which is also tapping into demands from Asian Markets . In the last few years , floods and other problems have hampered Australia’s exports , but with the problems being worked past , American companies are set to see stiff competition from the Australian counterparts. The demand and the prices are very high today and anyone who can ship to Asian markets , especially the demand from China , has lot to gain .

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