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  Introduction

Coal Prices, Supplies,
and Demand


Metallurgical Coal and Coke Markets


Coal Futures Markets

References

Tables

Table I. Average Quarterly U.S. Coal Prices

Table II. Prices of Metallurgical Coal and Coke by Disposition

Table III. Average Price of Coal Receipts at Coke Plants by Census Division

Table IV. U.S. Metallurgical Coal Disposition

Table V. Coke Supplies, Blast Furnace Production, and Iron and Steel Imports

Figures

Figure 1. Average Biweekly Spot Coal Prices, 2000-2001

Figure 2. Average Quarterly U.S. Coal Prices

Figure 3. Prices of Metallurgical Coal and Coke by Disposition

Figure 4. Coke Plants and Other Industries Are Minor Factors in Historical and Projected Coal Demand

Figure 5. U.S. Met Coal Exports Plunge as Domestic Demand Holds

Figure 6. Iron and Steel Imports Capture Market Growth

Figure 7. NYMEX Central Appalachian Coal Futures Near-Month Contract Final Settlement Price

Figure 8. Daily Volume Central Appalachian Coal Futures Contracts
U.S. Metallurgical Coal and Coke Supplies–Prices, Availability, and the Emerging Futures Markets

Coal Prices, Supplies, and Demand (Continued)

On a Btu basis, however, these changes were mild compared with the shocks experienced by many natural gas consumers. For that reason, coal was given a second look by electricity generators in 2001. As of October 2001, 49,447 megawatts of new coal-fired capacity had been announced. At least 34,000 megawatts of those announced were considered firm, and if built they would consume at least 176 million short tons of additional coal.2 Although it is not certain ultimately whether all of this will be financed and built, in the 5 years from 1996 through 2000 only 5,056 megawatts of new coal-fired3 capacity went into operation, so completion of even half of the announced plants would be a major turnaround.

What is more, both electricity generators and energy investors see coal as a potential hedge against the volatility in electricity and natural gas prices. In the past year, for example, the Energy Information Administration (EIA) has received a number of inquiries on Btu and price data for coal typical of contract and spot purchases for use in calculating spark spreads.4

The spot prices in Figure 1 should not be considered as indicative of average coal prices. Those prices were for short-term deliveries, usually for deliveries over 1.5 years or less. Since spot coal purchases—almost entirely for electricity generation—generally represent less than 20 percent of total deliveries, their effects are mitigated. The effects of changes in spot prices will phase in as existing contracts expire and as each new contract is negotiated. The new contract prices will be most influenced by the then current spot prices. However, if the trend in spot prices has been downward, the new contract prices will generally be lower than spot.

The Central Appalachian spot prices in Figure 1 are for coal from which much of the premium Appalachian metallurgical coal is prepared. Still, they tend to be lower than average metallurgical coal prices, including that bought under longer-term contracts. Average coal prices, including metallurgical, have been trending downward slowly, but for the iron and steel industry that average continues to be about 35 percent above other industrial coal prices (Figure 2, Table I).
D
Figure 2. Average Quarterly U.S. Coal Prices
Figure 2. Average Quarterly U.S. Coal Prices
      Source: Energy Information Administration, Quarterly Coal Report.

Coal Prices, Supplies, and Demand (Continued)