US coal prices are generally high due to the higher mining, railing, port and shipping costs compared to other mines in the world.
This means that the US has traditionally been the swing supplier in the coal market: the country ramps up exports when prices rise, resulting in the global market rebalancing itself.
However, DBX estimates US coal seaborne exports to drop from 5.8mt in August to 5.1mt in September, 0.6mt below the 5 year average of the same period.
Why have US coal exports not picked up despite the strength in both thermal and metallurgical coal prices?
Two main reasons:
1) US coal fired power stations are advancing in the merit order owing to strong Henry Hub natgas prices, which is making domestic sales more attractive than exporting for the mines
2) Hurricane Ida has disrupted shipments in most coal terminals located in the US Gulf
Source: DBX Commodities