As the price of natural gas soared, forcing power companies to increase coal-fired power generation, US coal inventories fell to their lowest level in at least 24 years. Coal producers said that almost all of next year’s output has been sold out. Peabody Energy Company, the largest coal supplier in the United States
Energy) next year in the Powder River Basin (Powder River Basin)
Basin) more than 90% of the production, as well as all the production of other mines are now sold out. Arch, the second largest coal producer
The entire output of Resources in the Powder River Basin next year has also been snapped up by utilities, and the price is 20% higher than the current spot price.
Peabody Energy CEO Jim Grech said on a conference call on Thursday: “Almost all sold out. We only have a small portion left for sale in 2022 and 2023.”
Alliance Resource, another coal producer, is expected to produce about 32 million tons of coal this year. The company has already finalized orders for 30 million tons next year and nearly 16 million tons in 2023.
As the global economy recovers from the epidemic, the demand for electricity and fuels for its production is soaring around the world. This has pushed natural gas prices in some regions to historically high levels. The ripple effect is that utility companies are burning more coal as an alternative energy source.
The U.S. Energy Information Administration (EIA) said last week that U.S. coal-fired power generation is expected to surge 22% in 2021. This will be the first annual increase in U.S. coal-fired power generation since 2014.
Government data released on Tuesday showed that US coal inventories fell to 84.3 million tons in August, a record low for at least 24 years. Consulting firm Wood Mackenzie predicts that coal inventories in the United States may fall to 50 million tons by the end of this year.