The U.S. coal industry in 2006 experienced record production but lower coal consumption. Coal imports again reached a record level while coal exports declined slightly, resulting in a decline in net exports for 2006. On the positive side in 2006 for coal producers, delivered coal prices continued to increase for the year and for coal consumers, coal stocks recovered from their low 2005 levels in the electric power sector. Producers and consumers both benefited by the resolution of some of the major transportation problems that plagued the industry in 2005. Absent any unusual transportation issues, the outlook for U.S. coal in 2007 is also mixed. Expectations of continued economic expansion and a return to more normal weather should drive an increase in coal consumption. However, the softening of the spot market prices and the somewhat lower end-of-year consumer stock level will result in lower production to keep the coal market in balance. (See the Energy Information Administration's Short-Term Energy Outlook.)
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