Coal demand up in first part of 2013, but prices stay steady

Jul 29, 2013

Demand for coal was higher and supply lower in the first half of 2013 compared to the same period in 2012, but prices remained mostly steady. That’s because electric companies burned off their coal inventories instead of buying new supplies.

Executive Director of the Wyoming Mining Association, Marion Loomis, says he expects the second half of the year to be better.

“Certainly the inventories are down somewhat and that has led to increased production. We’ve been down most of the year, but the last numbers I’ve seen show us at about the same level as we were last year. So, we’re picking up a little bit of that lost production,” says Loomis.

Rising prices for natural gas could also help drive stronger consumption of Powder River Basin coal. Loomis says if natural gas stays around $4/mcf, he thinks Wyoming coal will continue to be in demand.

“Right now it’s less than that, so some of the industry will be hard-pressed to compete. But Powder River Basin, Wyoming can still compete at those prices and I think there will be some increased demand for Wyoming coal in the second half of the year,” says Loomis.

Production of Wyoming coal from January to June of 2013 is down about 4.5% from the same period last year.