Though Not a Record Year, the Coal Industry Performs Well in 1983

Supply and Demand After a dismal first half, the industry saw a marked improvement in its markets during the final six months of 1983. Domestic consumption was 17.6% higher in the second half of the year, primarily due to a surge in electric power requirements. The sharp increase in demand for electric power during the third and fourth quarters afforded utilities the opportunity to lower stocks that had accumulated to record levels during 1982. Consumer stocks were reduced from 179 Mt (197 million st) at the end of June to 153 Mt (169 million st) by the end of the year. That is the largest inventory drawdown on record during a six-month period without a major coal strike. Despite the huge depletion in inventories, coal production in the second half of 1983 rose 1.3% above output in the second half of 1982. However, because of the disappointing first half, production in 1983 totaled only 712 Mt (785 million st), 6.4% less than the 760 Mt (838 million st) produced in 1982. Demand The extent to which the economic recovery affected coal markets in 1983 varied: • total domestic coal consumption increased 4.2%; • electric utility coal consumption increased 5.3%; • exports declined by about one-fourth; • coal consumption at coke plants declined 9.5%; and • coal consumption in the other industrial sectors increased 2.9%. Domestic coal consumption totaled 667 Mt (737 million st) it 1983, 27 Mt (30 million st) more than 1982. Electric utility consumption increased from 539 M1 (594 million st) in 1982 to 567 M1 (625 million st) in 1983. Coal consumption at coke plants declined from 37 Mt (41 million st) to 34 M1 (37 million st). Residential and commercial use increased 181 kt (200,000 st) - from 7.4 to 7.6 Mt (8.2 to 8.4 million st). Electric Utilities: Electric power generation increased 3.1% in 1983. Demand for electric power increased in all major consumer categories. Residential and commercial use rose 2.7% and 3.3%, respectively. The most striking increase, however, and indicative of the economy's strong upturn, was the increase in industrial electric power use. Industrial power requirements, which declined 9.8% in 1982, rose 4.1% in 1983. The electric utility sector continued to expand its use of coal last year while lowering its requirements of oil and natural gas. In 1983, electric generation from coal increased 5.7%, while genera-