December 15, 2025 - US coal market prices extended a steady rally in November, with export and domestic benchmarks making gains.

Through 2027, firm natural gas prices are expected to support increased coal generation, driving stable or growing coal production. After 2027, the US coal market is forecast to face pressure from the expansion of zero-carbon electricity, incentivized in part by broad-based tax credits. Overall, the S&P Global Market Indicative Power Forecast projects 38.4 GW of coal plant retirements by 2035, with much of the planned retirement activity deferred until after 2030.

Coal plant generation share through 2035 is forecast to decline slowly to just 7.5% from 18.7% of total generation in 2026. The rapid phaseout of tax credits under the recently approved US tax and spending bill — also referred to as the One Big Beautiful Bill Act — is forecast to slow the wind and solar generation growth, allowing coal plants to run more often after 2030. The most production uplift will take place at the Powder River Basin (PRB), followed by the Illinois Basin (ILB), as the reduced growth of wind and solar generation mainly affects the generation mix in the Midcontinental US.

The take

• US coal prices again moved higher in November, with production and shipments essentially flat year over year for the month.
• The S&P Global Market Indicative Power Forecast anticipates 38.4 GW of coal plant retirements by 2035, amid market pressure to retain existing generation due to greater reliability needs and slower forecast growth in solar and wind energy.
• The production outlook varies by region, with the Powder River Basin and Illinois Basin expecting stable to slightly growing production through 2027, while Appalachian coal production is forecast to decline due to reduced domestic demand and limited export growth.

Coal prices gained across the board in November, impacting export and domestic benchmarks. CAPP region export benchmarks added $1.00/short ton to $81.00/short ton (1.3%), NYMEX CAPP added $2.00/short ton (2.6%) to $78.00/short ton, and NAPP Pittsburgh Seam 13,000 Btu per pound gained $2.00/short ton (3.3%) to $62.00/short ton. Illinois Basin 11,500 mid-sulfur moved higher by $1.00/short ton to $51.25/short ton, while the NYMEX Powder River Basin benchmark gained $0.10/short ton to $15.00/short ton.

Winter weather settled across most of the continental US during November, supporting growth in natural gas prices. Henry Hub spot gas opened at $3.57/MMBtu and eased to a mid-month low of $3.49/MMBtu before rallying to close November at $4.12/MMBtu. Spot prices averaged $3.73/MMBtu for the month. Storage withdrawals began with the arrival of heating demand, with working gas reaching its likely maximum level of 3,946 BCF as of Nov. 14 — 146 BCF above the five-year average and 23 BCF above the same week of 2024.

Regional gas market prices were correlated, with late summer discounts to Henry Hub holding steady. Chicago Gate averaged $3.40/MMBtu, a $0.33/MMBtu discount to Henry Hub. TCO Pool's discount shrank to $0.50/MMBtu for a monthly average of $3.23/MMBtu, while TETCO M3's discount shrank to $0.44/MMBtu for a monthly average of $3.29/MMBtu. SoCal Border averaged $2.97/MMBtu in November, $0.76/MMBtu below Henry Hub.

The US Energy Information Administration (EIA) estimated August 2025 coal stockpiles at 105 million short tons (MMst), a modest 4 MMst decrease from July, indicating generally mild summer conditions.

Current forward pricing for PRB coal has been flat and stable, reflecting sufficient inventories at power plants and mining capacity to increase production as needed against firmer natural gas prices. After 2027, lower natural gas prices and declining coal demand are forecast to restrain price growth.

Bituminous coal price levels are primarily influenced by export markets, with today's price levels making domestic coal generation generally less competitive against Northeast natural gas. Firmer eastern natural gas prices have nevertheless boosted demand for the first half of 2025, even as seaborne coal demand is expected to decline 7.7% year-over-year due to reduced demand from India and China.

Pricing benchmarks exceeding $65/short ton suggest sustainable returns for eastern bituminous coal, with Atlantic Basin export above that threshold and coal competing in Pacific Basin export markets generally below. After declining in 2024, bituminous coal demand for electric generation is expected to remain stable through 2027 on higher electricity demand and more supportive natural gas prices. Declines in steam coal demand are expected to resume after 2027, and the overall Eastern US coal demand is forecast to decline 71 MMst in 2025–30.

Outlook for US coal production, demand

For the four weeks ending Nov. 15, coal shipments averaged 9.9 MMst, 2.0% above 2024 levels. After a relatively mild summer, somewhat elevated inventories have brought shipments back into line with 2024.

The chart below compares the current production forecast with recent history. We forecast increased coal demand against higher natural gas prices through 2027. Gas-to-coal switching during the first quarter of 2025 reduced coal inventory surpluses from 2024-end, setting up production growth in 2025. We now forecast coal production at 536 MMst, an increase of 24 MMst (4.7%) from 2024 levels. Coal generation is forecast to further gain market share from natural gas through 2027, until relative coal and gas pricing normalizes and expanding green energy again puts pressure on coal generation. The overall coal market, including domestic demand and exports, is forecast to decline 141 MMst between 2025 and 2030.

Production outlook — Powder River Basin

Production reports of the Mine Safety and Health Administration (MSHA) for the second quarter of 2025 indicate the year's first-half production at 110.4 MMst, or an annualized rate of 220.9 MMst. Production is now forecast at 218 MMst in 2025, with higher inventories potentially constraining production in the second half. Production is forecast for modest growth through 2027 against higher natural gas prices. By 2030, S&P Global Energy projects that coal retirements in the Midwest and expansion of wind generation in PRB's core markets will gradually shrink the coal demand to 192 MMst, declining further to 156 MMst through 2035.

Production outlook — Illinois Basin

MSHA's 2025 June quarter production reports indicate first-half production at 34.7 MMst, or an annualized rate of 69.5 MMst. We forecast stable annual production of 78 MMst through 2027, after which the expansion of wind generation and announced coal retirements are forecast to erode the ILB coal demand. Coal production in the ILB is forecast to fall to 60 MMst by 2030, declining further to 39 MMst by 2035.

Production outlook — Appalachian basins

MSHA's production reports for the June quarter of 2025 indicate first-half production at 80.2 MMst, or an annualized rate of 160.4 MMst. Appalachian coal demand tends to be more sensitive to global seaborne markets than to domestic natural gas prices, compared to the PRB or the ILB — which are forecast for improved demand against natural gas generation — therefore, gains in Appalachian coal will be more limited. We forecast production at 165 MMst, 5.1% higher than 2024. As remaining domestic demand erodes after 2027, with only modest offsets from export growth, Appalachian production is forecast to fall to 112 MMst by 2030.

Further information

Market indicative coal forecasts by S&P Global Energy represent forward curves for spot-traded instruments, analogous to a strip of contracts. The shorter tenors — current year and prompt year, plus additional years, if available — are driven by the observed/assessed market. The longer tenors — typically forecast years three to 20 for physically assessed markers — are driven by fundamental estimates of cash costs of production, accepted returns to capital, regional productive capacity, and forecast supply and demand. For the long-tenured portion of the curve, S&P Global Energy forecasts prices for specific coal markers and defines the remaining markers via historical spreads.