NEW YORK U.S. metallurgical coal exports will remain elevated in 2013 on rising global steel output, Arch Coal Inc.s top executive said.
"Global steel production is projected to grow in 2013, with Asia, Latin America and the United States leading the increase," president and chief executive officer John W. Eaves said April 23 during a conference call to discuss the companys first-quarter earnings results.
Growth in North and South America is evident, he added. Utilization rates at U.S. steel mills have remained in the mid- to high-70-percent range amid strong demand from the automotive, energy and construction markets.
"We believe that higher U.S. steel output could translate into increased buying activity from our met coal customers in the second half of the year," Eaves said.
St. Louis-based Archs metallurgical coal exports rose 15 percent year on year in the first quarter, while exports to Asia are also growing.
U.S. coal exports are expected to top 100 million tons in 2013, he noted.
"We continue to see buying activity from our European met coal customers, particularly for high-volatile met coal. But prices remain weak," Eaves said. "Exports are expected to continue their upwards trend in the future as port capacity in the U.S. is built or expanded."
The company is securing port capacity in the United States to facilitate the movement of metallurgical and thermal coal to the seaborne trade. In 2011, Arch bought a 38-percent interest in Millennium Bulk Terminals-Longview LLC in Washington state, which will enable it to export coal from the West Coast to customers in Asia.
The company recently signed an agreement with local labor to handle construction of the port, Eaves said.
A version of this article was first published by AMM sister publication Steel First.