U.S. Mining Forecast: Is Coal Still King?

U.S. Mining Sector Remains Steady Despite Projected Decrease of Coal

Two years after President Donald Trump made a campaign promise to revive America's "coal country," the U.S. mining market hasn't yet boomed but continues to remain steady. A revival of coal, on the other hand, remains unlikely.

Two years after President Donald Trump made a campaign promise to revive America’s “coal country,” the U.S. mining market hasn’t yet boomed but continues to remain steady.

A revival of coal, on the other hand, remains unlikely. The U.S. Energy Information Administration (EIA) estimates that coal production declined by 20 million short tons in 2018. However, Appalachian coal production increased in 2018 due to the strength of its exports, but interior and western production declined by 5% and 3% respectively. U.S. coal production is expected to further decline 3% this year and 7% in 2020, according to the EIA.

At the Tire Industry Association’s (TIA) 2019 OTR Conference, Kevin Rohlwing, TIA’s vice president of training, shared information and trends regarding the U.S. mining market, including in which areas we should see a resurgence in 2019 and beyond.

“If you take a look at coal, coal in Appalachia and in the central [U.S.] is looking good, so all of the dealers and retreaders that service the coal market in the east and the central U.S. can expect pretty consistent demand,” he said. “The west doesn’t look so good.”

Rohlwing said its important to pay attention to coal usage and production in the Asia-Pacific region as well. China, a large importer of U.S. coal, significantly decreased its coal imports around the second half of last year due to U.S. tariffs. With population growth in Asia Pacific areas, the need for power and electric is growing, which Rohlwing said could allow coal to return to a bull market.

Other metals and elements that Rohlwing discussed included:

  • Gold: Major U.S. banks forecasted the price of gold per ton to increase in 2019 with Goldman Sachs estimating a 10.7% increase in gold prices by the end of this year.
  • Silver: Mining production is expected to decline slightly in 2019. However, the demand for silver and its price is expected to rise, according to the Silver Institute.
  • Rare Earth Elements (REE): Metals used in modern technologies such as cell phones, computers, cars and military equipment are expected to increase in global consumption by 24%.

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