CHARLESTON, W.Va. - West Virginia's coal industry benefited from substantial growth in export markets in recent years, but executives from two coal companies issued a bleak forecast for the future during an industry forum in Charleston Thursday.
Jack Porco, president and chief operating officer at Latrobe, Pa.-based Xcoal, and Michael Zervos, president and chief executive at United Coal, both said U.S. coal exporters will face significant challenges over the next several years.
"It's going to be a tough time for coal, and it's going to be a tough time for West Virginia," Zervos said.
"Only the low-cost producers are going to be able to survive," Porco said. "Not everyone is going to survive in this market."
The two men spoke Thursday at a meeting of The Coal Forum, a state-funded group that brings industry representatives together to discuss issues currently affecting their markets.
The future export forecast offered Thursday is a sharp about-face from recent years, when West Virginia enjoyed record growth in its coal exports.
State coal exports grew 40 percent last year, increasing from $5.3 billion in 2011 to $7.4 billion in 2012.
Asian countries like China and Japan led the growth, with Japan's imports of state coal increasing from $29 million in 2011 to $395 million in 2012 while China's imports grew from $93 million to $567 million over the same time.
West Virginia coal companies exported 27 percent of the coal they mined last year and accounted for almost half of all coal shipments leaving U.S. shores in 2012.
While 2012 was good, coal exporters have faced significant headwinds in 2013. Markets that looked promising last year look less-so now: The European economy has slowed, growth in China and India have experienced mixed growth and Brazil has not expanded as expected.
This economic sluggishness in emerging markets produced an oversupply, particularly for metallurgical coal, which is used to make steel.
As a result, prices have fallen dramatically.
In early 2011, foreign coal buyers were paying up to $300 a ton for coal at foreign ports. That price plunged to less than $150 a ton this year.