first_imgEven hot summer not likely to help U.S. coal industry FacebookTwitterLinkedInEmailPrint分享S&P Global Market Intelligence ($):Forecasts for a hotter-than-normal summer across the U.S. may somewhat offset lackluster coal demand from domestic power customers.Temperatures across most of the United States are likely to be above-normal for the next few months, according to the National Weather Service outlook for July through September. If so, the hum of air conditioners and other sources of increased electricity demand could lower utility coal stockpiles and drive additional buying activity.Coal plant retirements have reduced the number of domestic buyers, though power plants operating at a lower capacity could offer an opportunity for increased sales. Coal’s year-to-date share of U.S. electric generation declined 4.9% year-over-year through April, according to a recent S&P Global Market Intelligence analysis.A hotter summer would be positive for coal, but probably not “hugely positive,” said Matt Preston, research director for North America coal markets for Wood Mackenzie. “It could be slightly stronger for coal if it’s hotter because there are some places where coal units are marginal units, but nobody’s thinking it’s going to be a big boon,” Preston said. “There’s just so many units that have retired that any serious run on coal is not expected.”At a May transportation conference, Kansas City Southern CFO and Executive Vice President Michael Upchurch said customers were telling the railroad to expect a ramp-up in coal activity through the summer in markets like Texas and Arkansas. However, he described the uptick as simply being “less worse” in a market that will decline on an ongoing basis.More ($): Hot summer could boost US coal, but expectations tempered by secular declinelast_img

Even hot summer not likely to help U.S. coal industry

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