Boilers, Coal

2008 coal production forecast near record: NMA

23 January 2008 — United States coal production in 2008 will be near the record set in 2006, defying a slowing economy, said the National Mining Association (NMA) in its annual forecast for coal. NMA also forecast record demand in 2008 for America’s coal reserves.

The 1.16 billion tons of production NMA forecasts for 2008 tops the 1.147 billion tons mined in 2007 and is just 2 million tons shy of the 2006 production record, said the Washington, D.C.-based trade group for the U.S. coal and metals industry. NMA’s forecast for coal is based on projections reported from the association’s member companies.

NMA said that in 2007 the United States had more coal-based power plant capacity than in any year in this decade. In addition, it said another 24 coal-based plants are under construction. Two coal plants are projected to come on line in 2008, following the addition of three plants in 2007.

NMA expects coal production in the Eastern U.S. this year to remain flat at 480 million tons, while Western production will likely increase to 680 million tons, a 2.1 percent gain over the 2007 level.

The projected record-breaking coal demand of 1.209 billion tons will surpass last year’s 1.194 billion mark. A 1.3 percent to 1.7 percent increase in total electricity demand and another strong year for exports, fueled by a weak dollar and strong offshore demand for metallurgical and steam coal, will drive coal demand in 2008.

NMA said its 2008 export projection of 64 million tons is “conservative, especially for high-grade met coal.” Coal imports will remain flat at 36.5 million tons in 2008 after rising sharply over recent years, said NMA. Meanwhile, coal inventories at U.S. power plants will approach “optimum levels” in 2008 following two successive years of “sharp build ups.”

Copper production in the U.S. is expected to grow slowly in 2008 from the 1.250 million metric tons mined in 2007, the highest level since 2001. Global demand for refined copper is forecast to rise by 5.9 percent this year, following 5.2 percent growth in 2007. Copper production worldwide is expected to balance demand in 2008 due to increases in capacity primarily outside the U.S.

Other metals, including nickel, lead, zinc and iron ore, will continue to be in demand by rapidly industrializing countries in 2008, NMA said.