North America Coal Short-term Outlook February 2023

The coal demand slump that started in January carried over into February. Weak coal-fired generation in the early months of 2023 is attributable to mild weather paired with abundant, cheap natural gas. With coal generation losing market share to natural gas, stockpiles are rapidly transitioning from undersupplied to replenished with a risk of soon becoming oversupplied. On the supply side, producers have hired more workers and ramped up operations. They are fully contracted for the year. As long as rail service doesn’t disappoint, many producers see an upside to their 2023 sales guidance, especially in the export markets where netbacks are favourable.