North America coal short-term outlook May 2020: Supply corrections and careful optimism

As outbreak restrictions began to ease in May, the US economy and total power demand began rebounding from the coronavirus-driven lows seen in recent months. Data for the first four months of 2020 show that the pandemic and coal demand loss sent a shockwave through the global coal industry. Particularly for US domestic thermal. We currently forecast a 150 Mst or 21% annual decline in total coal production this year. This would be the largest proportional production decline on record and the second largest annual drop in tons produced. The extreme imbalance in market fundamentals resulted in coal producers trying to play catch-up by cutting supply and laying off workers. Similarly, utilities are doing their best to defer or buy-out of some 2020 contractual agreements.