Coal 1988

The year 1988 unexpectedly turned out to be a good year for the US coal industry. In fact, it was a third consecutive year of record coal production. Accord¬ing to preliminary Energy Information Administration data for 1988, domestic coal consumption went up 5%, or 41 Mt (45 million st), from 1987. Coal exports were up by a surprising 13.6 Mt (15 million st). In 1988, 22.7 Mt (25 million st) of coal were drawn from stockpiles for consumption. Even so, US coal production increased to 862 Mt (950 million st). That was up 28 Mt (31 million st) from 1987. While coal consumption, exports, and production were up, delivered prices for steam coal continued to slide during the year. Metallurgical coal prices, however, firmed up and showed a moderate increase. This reflected tight metallurgical coal markets at home and abroad. Coal consumption US coal consumption reached 800 Mt (882 million st), compared with 759 Mt (837 million st) in 1987. Increased metallurgical coal consumption was one factor. Most of the rise in coal consumption, however, was due to unexpectedly high electricity demand. Unseasonably hot summer weather al lowed added coal-fired electric generation to supplement the drought-related reduction in hydro-electric power supply. Electric utilities consumed 687 Mt (757 million st) of coal in 1988, 35.4 Mt (39 million st) more than in 1987. Coal-fired power plants remained the primary source of US electricity generation, providing 57% of the total in 1988. Coal consumption at coke plants increased 13%, to 38 Mt (42 million st), from the level consumed in 1987. This increase reflects the recent recovery in the iron and steel industry. Metallurgical coal consumption in 1988 could have been greater. But US coke plants reportedly reached their maximum practical production capacity. As a result, net US coke imports amounted to 1.45 Mt (1.6 million st). Despite increased industrial activities, steam coal consumption by industrial plants was up only slightly from the 1987 level, amounting to 69 Mt (76 million st) in 1988. Residential and commercial coal consumption remained virtually unchanged at 6.4 Mt (7 million st). Coal exports and imports US coal exports rebounded in 1988, reaching 86 Mt (95 million st). It was the highest level of annual US coal exports since 1982, when they reached 96 Mt (106 million st). An unusual set of factors led to an opening for US coal exporters in 1988: • a high level of industrial production in Japan and the European Economic Community, • supply disruptions due to labor problems at coal mines in Poland and Australia, • a drought-related reduction in hydro-electric power generation in Canada, requiring increased coal-fired generation, • China's problems in meeting its export commitments, and • a fall in the value of the US dollar. US metallurgical coal exports in 1988 amounted to 56 Mt (62 million st), 9.1 Mt (10 million st) more than the 1987 level. Europe, Japan, and Canada were the principal importers of US metallurgical coal in 1988. European countries, in particu¬lar, increased their take by one-third of US metallurgical coal. The labor problems in Poland and Australia contributed to these higher levels of imports. So did increases in pig iron production of 8% in Japan and 9% in the European Economic Community. US steam coal exports - including bituminous, anthracite, and lignite-increase to 30 Mt (33 million st). This was up from 25.4 Mt (28 million st) in 1987 Contributing to this overall rise were 1.8-Mt (2-million st) increase in shipments to Canada and a 2.7-Mt (3-million st) increase to Europe. Unaffected by the somewhat tighter world coal market, US coal imports showed a slight increase to 1.8 Mt (million st) in 1988. Colombia continue to be the leading exporter to the United States, followed by Canada and Venezuela. Venezuela's entry into the US market is a relatively recent one, having made its first significant shipment in the fourth quarter of 1987.