Washington (Platts)--10Dec2010/743 pm EST/043 GMT

US metallurgical coal exports in 2010 will exceed earlier estimates by at least 5 million st, the Energy Information Administration said this week.

In its December 2010 Short-term Outlook, EIA Tuesday said it expects US met coal exports this year will total 55.9 million st, 33% above the 2009 total of 37.3 million st, largely because of a global surge in steel production.

EIA data show met coal exports rose 62% to 39.8 million st during the first half of 2010 from the same period in 2009. In April, coal industry officials and analysts estimated US met coal exports would be pushing past the 40 million st range and nearing 50 million st.

EIA now estimates total US coal exports for 2010 at 76.5 million st, 23% above 2009 levels, but said steam coal's share of the exports will fall 6% to 20.6 million in 2010 in part because of efforts in Ontario and Quebec to phase-out coal-fired generating capacity.

In 2011, EIA is projecting a decline in both met coal and total US coal exports, with met coal exports expected to total 52.6 million st and total exports 74 million st. EIA attributed the projected decline in met coal exports to increase supply from other countries, who could benefit from lower shipping costs.

EIA analyst Elias Johnson said met coal producers in Colombia and Australia are able to ship product at much lower prices than can US suppliers.

But an analyst who specializes in the global seaborne met coal market took issue with EIA's forecast that met coal exports would decline in 2011, saying he believes US exports will continue to rise particularly if prices remains above $200/mt.

Heavy rains in Australia have forced some mining operations to halt and that, along with healthy prices, mean that "all the ingredients are there for the US to export more met coal [in 2011] than it has this year," the analyst said.

As of Thursday, spot supply of met coal was tight out of Australia, with many of the miners focused on fulfilling their contracts. A trader said the tightness could extend into early next year, as many miners had fallen behind in their operations.

Australian producers Macarthur Coal and Aquila Resources earlier this month declared force majeure due to persistent heavy rain at their Queensland mines.

"The force majeure declarations out of Australia are creating a backlog, putting positive pricing pressure on met coal coming out of US and Canada," the analyst said.

--Amena Saiyid, amena_saiyid@platts.com --Julien Hall, julien_hall@platts.com

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