Many coal companies and other sources are reporting their final 2020 coal production figures. Readers will note these figures throughout this edition of Coal Age. For the most part, the declines in coal production range from 10% to 25%. Considering that many of the businesses that were able to survive the 2020 COVID-19 lockdowns saw their revenues drop anywhere from 10% to 30%, the coal production losses seem to fall in line with what happened to other industrial sectors. As always, there are exceptions. Coal production in China and India continued to grow, albeit at a slower pace.
For perspective, according to the Xinhua news agency, China was expected to produce 3.84 billion metric tons (mt) in 2020, an increase of 90 million mt over 2019 or 2.4%, and it imported 304 million mt in 2020, which was a 4-million-mt increase (1.3%). India’s 2020 coal production, according to Iman Resources, grew to 727 million mt, a 7-million-mt increase (1%) over 2019, while its imports dropped 12% from 231 million mt in 2019 to 204 million mt in 2020.
The decline in U.S. production was more substantial. While the final figures were not yet available from the U.S. Energy Information Administration as this edition was going to press, the latest figures indicated that total U.S. production had dropped 23.7% from 708 million tons in 2019 to 540 million tons in 2020. Those figures are equivalent to 644 million mt and 491 million mt, respectively, for 2019 and 2020.
Australia reports its coal export statistics on a fiscal year (FY) basis. For FY2019-2020, coal exports totaled 390 million mt, which were broken out as 213 million mt of thermal coal and 177 million mt of metallurgical coal. For FY2020-2021, and prior to the recent dust up with China, the Australian government was predicting 368 million mt, a 6% decrease, which broke out as 158 million mt of thermal coal and 46 million mt of met coal. Late last year, a trade dispute erupted between China and Australia that affected many of the goods China imports from Australia, including coal, but not iron ore. China can and has now purchased more coal from other regions, such as Russia, Indonesia and Canada, which has caused a significant market shift in the Australian-Pacific coal market. More details are offered in the Coking Coals article (See p. 30).
Many coal companies are already discussing the recovery they expect in 2021. As this edition was going to press, Alliance Resource Partners reported its fourth quarter earnings and offered some market optimism (See Leading Developments, p. 5). Readers can also read some positive market developments in the U.S. Longwall Census (See p. 14) and the Coking Coal report. Readers should not mistake this guarded optimism for a full-blown recovery. That will only happen when demand for electricity and steel begin to grow again in earnest, but market indicators are looking better for 2021.