North America Coal Markets: 2018 in review and what to look for in 2019 Report

Insight 15 January 2019

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Report summary

The US coal market in 2018 experienced a year when fundamentals of supply, domestic demand, and exports finally came into balance. However, the global energy transition continues to move away from fossil fuels to renewables. Solar power, wind power and battery storage have emerged around the country across many types of geographies and could disrupt the current state of power markets. The cost of new wind and solar generation beats the cost of fossil fuel generation, even without subsidies in some cases. Solar photovoltaic costs have fallen 80% since 2010 while onshore wind saw costs drop 30% over the same period. Similarly, battery costs saw unprecedented drops of 80% since 2010. The most aggressive battery penetration scenarios from three or four years ago did not predict this level of drop to happen until 2035.

Prices: low liquidity in the spot market
Demand: stockpiles finally balance after years of an enormous overhang
Supply: boost in exports helped to buffer another domestic demand loss
Federal government moves forward with initiatives to develop advanced coal technology and roll back regulations
US coal fleet survival depends on winter weather and natural gas prices
2019 looks more bearish for US exports