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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 Futures Market

The New York Mercantile Exchange (NYMEX) launched its coal futures market in July 2001. Its only commodity so far is Central Appalachian coal, priced for transfer at docks along specified stretches of the Ohio River or the Kanawha River in West Virginia. After a surge of open interest6 and closed contracts in the first month after opening, transactions declined during the late summer. During that time it was widely felt that the NYMEX market was quoting unrealistically low prices, and few sellers were attracted. Figure 7 indicates the actual settlement prices for near-term contracts (no contracts are for delivery beyond 26 months). Figure 8 shows the actual number of contracts settled on each day of business. In recent weeks (i.e., during November 2001) an average of about 40 contracts were settled each day. The size of a standard contract is 1,550 short tons.

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

As noted by the NYMEX, non-utility industrial coal users, such as steel mills, can use futures to lock in their own coal supply costs.7 The future of coal prices may include additional spikes in reaction to extreme price fluctuations in the natural gas and electricity trading markets. This vehicle offers one option to lock in favorable prices—even for coal that could be resold—when longer-term contracts are not favorable.

In addition to the NYMEX futures, numerous over-the-counter markets are now trading on-line. It may be another year or so before some of these ventures merge or drop out, and the system settles on one or two sets of standards. Currently, these markets offer a wide variety of steam and “compliance” coals, the latter being of possible interest to iron and steel producers.

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Figure 8. Daily Volume Central Appalachian Coal Futures Contracts
Figure 8. Daily Volume Central Appalachian Coal Futures Contracts