Nearly one in five of the tons of coal delivered to U.S. power generators in the first three quarters of 2019 went to power plants planning to close by 2025 or earlier.

With no coal-fired power plants on the drawing board at home and diminished demand overseas, U.S. producers will likely struggle to find a new home for tons that were going to the export market as producers compete for what remains of a domestic customer base in secular decline. Of the 540.5 million tons of coal produced in the first three quarters of 2019, 406.0 million tons were reported as delivered to U.S. coal plants, an S&P Global Market Intelligence data analysis shows. Of those shipments, coal companies sent 19.6% of the tonnage to plants scheduled to retire before the end of 2025.

The domestic market needs to see coal producers pull back on output to match supply to demand, Alliance Resource Partners LP President and CEO Joseph Craft said on a Jan. 27 earnings call. This year will be an inflection point for producers, according to the CEO.

"Reduced export volumes and tepid domestic coal demand due to persistently low natural gas prices caused a significant oversupply in the United States, creating additional pressure on domestic coal prices and producers," Craft said. "We continue to believe that current market conditions are unsustainable for most of [Alliance's] competitors."

Of the 20.8 million tons of coal Alliance shipped to U.S. power plants in the analyzed period, 11.9% went to plants retiring before the end of 2025.

Power plants closed 13.7 GW of coal capacity in 2019, the highest annual level since 2015, a recent Market Intelligence analysis found. The U.S. Energy Information Administration estimated in January that another 69 GW of coal-fired capacity would retire, mostly by 2025. Based on its 2020 Annual Energy Outlook, the agency expects the annual rate of retirement from 2023 to 2025 to exceed the record 15 GW of coal-fired capacity shut down in 2015.

Other U.S. coal producers are even more reliant on plants scheduled to close by 2025.

Peabody Energy Corp. and Arch Coal Inc. are finishing regulatory approval for a joint venture tying together certain Powder River Basin and Colorado coal mines, hoping to better compete with natural and renewable energy resources. The two producers are the largest companies by production volume in the country's largest coal basin. In the first three quarters of 2019, 22.0% of Peabody's reported deliveries to power plants and 17.7% of Arch's deliveries to power plants went to power plants set to retire in 2025 or earlier.

"We're going to take whatever is there in terms of the market," Arch Coal's senior vice president of strategy and public policy, Deck Slone, said on a recent earnings call. "Rather than sort of sweating where the market is going to be, we know it's going to continue to be under some level of pressure. We're just going to continue to focus on that harvest strategy and taking cash to the fullest extent possible and managing our capital in a disciplined way."

Others may have it worse. All of the coal delivered from the mines owned by Westmoreland Mining Holdings LLC and Berkshire Hathaway Inc. went to plants set to retire before 2025. Hallador Energy Co. delivered more than half of its reported coal shipments to domestic power plants with plans to retire in the same period.

Other U.S. coal producers with significant exposure to upcoming coal plant retirements include the Navajo Nation's Navajo Transitional Energy Co. LLC, which recently expanded into the Powder River Basin through a bankruptcy auction sale; Murray Energy Corp., which is going through a bankruptcy reorganization; Blackjewel LLC, which is finalizing the sale of most of its assets to bankruptcy auction buyers; and NACCO Industries Inc., which recently said it expects coal deliveries to increase in 2020 due to fewer customer outages than experienced in 2019.