For the first time in 40 years the PRB is experiencing a prolonged declining domestic market. Our analysis suggests some improvement over the next year with demand increasing by ~30 million tons; however, we envision the domestic U.S. and Canadian markets declining by ~88 million tons by 2032.
PRB producers have reduced production by about 90 million tons/year since 2008. But the current supply/demand situation has reversed itself. Hanou Energy sees the market tightening and, by the end of 2013, there will be upward pressure on coal prices - the result of a projected 30 million to 40 million ton supply/demand shortfall. A $3-$4/ton price spike is likely to occur sometime in 2014.
According to findings presented in the report, the 2014 price spike will likely continue for a year or two, and then prices will return to lower levels as producers re-expand operations to fulfill the demand shortfall. The inevitable oversupply situation will likely resurface in 2015/2016.
We don't have all of the answers, but we do have many observations to share with our readers. Read on.
Prepared as a multi-client consulting study, this investigation is the most comprehensive review available on the PRB and Bull Mountain coalfield's coal geology, reserves, quality, historic, current and future coal production, coal control/ownership, transportation infrastructure, strip ratios, mine productivity and production costs for all active and proposed mines. Also included in this study is a historical analysis of PRB price trends and our twenty year demand and price forecast for PRB coal.
With this report the reader can:
The Powder River Basin Coal Supply, Demand and Price Trends 2012–2031 is available in hard copy.
Please call John Hanou at (410) 279-3818 or email at firstname.lastname@example.org if you have any questions.