Wholesale coal prices decreased across all basins during the first half of 2012 before leveling out through the rest of the year, according to the U.S. Energy Information Administration (EIA).
Through the summer, the competition between natural gas and coal brought down prices in the Appalachian and Powder River (PRB) basins, while a mild winter and high stockpiles at power plants limited demand for more purchases of coal in the second half of 2012.
The Central and Northern Appalachia prices fell 18 percent and 14 percent, respectively, from 2011, thanks to new competition from the Illinois Basin. Average annual PRB spot prices for 2012 declined almost 30 percent compared to 2011, while Illinois Basin prices decreased 5 percent, partially offset by a 9 percent increase in production because of demand for the high-sulfur coal from the region.
Coal production in the U.S. decreased across the board. Central Appalachia production decreased by 19 percent, followed by a 9 percent production decline in PRB. However, coal production in the Illinois Basin went up 9 percent from 2011, above its five-year range.
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