Characterised by ongoing decline in demand, combined with near-term erosion of financial strength driven by the adverse economic impact from coronavirus, the US coal industry is in need of consolidation.
This is the view of Moody’s lead coal analyst Ben Nelson, who said that the group’s concerns about competitive issues in the US coal market were increasing.
“Most coal producers were heavily contracted in 2020 and had significant open tons in 2021, setting the stage for continued depressed pricing in the absence of further rationalisation of mining assets across the industry or substantive consolidation.