Coal markets - North America short-term outlook - May 2021

Coal production in Q1 increased over Q4 2020 in all basins except PRB. ILB and NAPP saw the greatest but still modest production gains. Despite the expectation of increased strong summer cooling demand, most producers are remaining disciplined and have not rehired all miners that were laid off last year. We expect domestic thermal demand to outpace supply this summer. Generators will continue drawing from their stockpiles in the coming months while suppliers are mostly interested in selling only contracted tons and placing residual tons into their own stockpiles or the international market when prices allow. International prices grew significantly this month as demand for high CV coals spiked in response to the temporary closure of the Cerrejon mine in Colombia. Coal producers also reported strength in international interest throughout Q1 and have showed optimism towards the remainder of the year.