Working in the Coal Mine

Soundtrack for this week’s blog – put these on and enjoy your Friday reading!

Working in the Coal Mine

Sixteen Tonnes


The current US administration seems devoted to contributing to global warming, and today I thought we would do our best to interpret that literally (don’t worry, there’s a high-quality pun somewhere below).

First of all, it seems clear that the new policy direction has managed to halt the slide in the production of coal, and we might even detect a slight increase in the number of coal miners.


Simultaneously, we can see that total US energy consumption has increased over the past couple of years, and perhaps even staging a take-off after remaining on a plateau for years. However, and for a host of reasons (other than regulation), coal is not part of that story and consequently its share of total US energy consumption has decreased…


…and it’s difficult to identify any clear change in that pattern over the past few years. Now, if production is stable, while consumption has declined, there are only two options: Either inventories of coal are rising, or exports are.


Well, I think it is safe to say that inventories are not rising. To the contrary. The drawdown of stock is eye-catching, the equivalent to 1-2 months of production. Which leads us to the only remaining explanation – Coal exports are on the rise. And indeed, they are.

To round this off with a high-quality, if somewhat bitter-sweet, pun: It finally makes sense why the US administration wants to contribute to global warming…when it is of global houses! So, in the end, all president Trump ever really wanted was to win the ‘war on cold’. – Hmm, it’s strange how some jokes make me choke…

Disclaimer: We don’t usually have views and opinions about economic and financial states of affairs, (not ones that we express publicly as a company, anyway). We do believe, however, that people can and do appreciate a variety of perspectives. What you’ve just read is the perspective of the author. While we think our writers are very smart, Macrobond Financial does not expressly endorse the views presented here. And, as the old adage goes, you shouldn’t believe everything you read (not without finding the data, performing a few analyses and presenting it in a nice chart). We want to make it clear that we are not offering this information as investment advice. That being said, if you have Macrobond, you can easily check everything that’s mentioned here, and decide for yourself. If you don’t have Macrobond, now you have a great reason to get it.

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