The domestic market in the US is about 17 times the size of the export market. US production is largely directed to the domestic electricity market. Over 40% of US electricity generation is derived from coal, and the majority of coal production is sold to domestic utilities. Reliance on the domestic electricity market is expected to remain static due to policies making coal-fired plants less attractive and a weak steel industry. About 38% of US exports are steam coal, and only 62% coking coal.
In the early 1970s Asia was the largest market for US coal exports, but since 1978 Western Europe has been the primary market. Canada has been a consistent market for US steam and coking coal. Until 1980, US seaborne coal exports had been almost entirely coking coal but in 1980 Europe sharply increased its imports of US steam coal. European imports have remained about evenly split between coking and steam coal. In 1981, Japan and Taiwan increased imports of US coal but imports have remained dominantly coking coal.
The US consequently experienced a very favourable period for its coal exports after 1978, meeting expanding demand in Europe, Asia and South America. The withdrawal of polish supplies to Western European markets created opportunities for US exports to Europe in the early 1980s. The shortfall in UK production arising from the miners strike of 1984-85 was made up partly by imports from Australia and the US, but mostly by replacement of coal by heavy fuel oil.
From the mid 1980s US coal came under competitive pressure from South African steam coal and Australia coking coal. Factors contributing to this development included lower freight rates, and a weakening in exchange rates against the US dollar. These factors continue to be significant with respect to the US contribution to the market. US exports have fluctuated severely and producers have been able to sustain this because of the dominance of domestic demand.