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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

References

1 Energy Information Administration, Annual Energy Review 2000 (DOE/EIA-0384(2000)) (Washington, DC, August 2001), Table 7.8. When adjusted for inflation, the constant-dollar prices for coal peaked in 1975.

2RDI Consulting, New Coal-Fired Generation: The Race Is On, Conference Workshop at 24th Coal Marketing Days, September 24-25, 2001, Westin Convention Center (Pittsburgh, PA 2001). The RDI compilation is not analogous to the Energy Information Administration's (EIA) survey data for planned new coal-fired capacity. One reason is that the latest EIA survey is for planned new units (during the next 5 years), as of the end of calendar year 2000. It includes no part of 2001, when announcements of planned new generating units proliferated. Also, EIA capacity is expressed not in nameplate capacity but in net summer capability, which averages 5 to 6 percent smaller for coal-fired units. A more compelling reason, however, is that announcements usually represent the earliest, exploratory phase of project evaluation. Some announced capacity is later found to conflict with competing announced or planned units or to be economically unfeasible. Announcements may come months before any legal or financial commitments or the market and engineering studies needed before projects are generally considered planned or committed.

3Data are from Energy Information Administration, Electric Power Annual 2000, Volume II (DOE/EIA-0248(2000)/1), and prior 4 years' reports (Washington, DC August 2001), Table 4, and earlier versions.

4A spark spread is traditionally the price of electricity relative to the price of gas on the daily spot markets. Using assumptions as to the efficiency of a selected generating technology (e.g., how many million Btu of gas (or coal) is required per megawatt of electricity generated) allows comparison of the relative cost of purchasing the equivalent power in a particular electricity distribution region. The spark spread is sensitive to the Btu content of the fuel, the heat rate or efficiency of the generating technology, and the assumed wholesale prices of the fuel and the electricity.

5Energy Information Administration, Annual Energy Outlook 2002, Early Release (DOE-EIA-0383(2002) (Washington, DC, November 2001), Table 16.

6Open Interest is the number of open contracts of a given future or option contract. An open contract can be a long or short contract that has not been exercised, closed out, or allowed to expire. A futures contract always involves a buyer and a seller. Therefore, one unit of open interest always represents two people, a buyer and a seller. By itself, open interest only shows the liquidity of a specific contract or market, but combining volume analysis with open interest may provide subtle clues to the flow of money in and out of the market: rising volume and rising open interest confirm the direction of the current trend; falling volume and falling open interest signal that an end to the current trend may be imminent.

7New York Mercantile Exchange, "Central Appalachian Coal Futures," descriptive article on internet web site at http://www.nymex.com/markets/cont_all.cfm?CID=26&cont_name=info , December 2001.