Through June, coal imports were surprisingly, slightly ahead of the first six months of 2006, despite the wretched price atmosphere that has seen both prices and US domestic coal production decline this year. In 2006, total imports exceeded 36M st for the first time – will 2007 be a repeat, or will we see some corrections in the second half, reflecting a depressed US market, but strong markets in both Europe and Asia?

Positive long term fundamentals are in progress – Kinder Morgan’s new dedicated coal import facility in Newport News – Pier X will be on line sometime in 2008, while investment in mining and transport in Colombia are likely to see production growth of about 7M tons for 2007 and a further 8-10M in 2008.

Appalachian production continues to face cost pressures and two significant events within the next 12 months are likely to change the face of the industry once again. The capital and training costs associated with the MINER Act of 2006 have added significantly to the cost burden for underground mines such that marginally profitable operations may be at risk for being shut down. Secondly, the tax credits associated with synthetic fuel production ends December 31st of this year and the impact could reduce production by 10-20M tons on an annual basis. Coal supply, while not an issue this year, may well jump to the forefront in 2008.

These issues will be front and center at The McCloskey’s 7th US Coal Imports Conference in St. Petersburg, Florida. The event will once again be held at the Renaissance Vinoy Resort and Golf Club in St. Petersburg, Florida located on beautiful Tampa Bay, from November 27th to the 29th, 2007.