The collapse of a major bridge in Baltimore on Tuesday will likely shut down coal exports from the port for as much as six weeks and block the transport of up to 2.5 million tons of coal, said Ernie Thrasher, chief executive officer of Xcoal Energy & Resources LLC.
Last year, the United States exported about 74 million tons of coal, with Baltimore being the second-largest terminal for the commodity. The closure of a major coal hub threatens to disrupt global energy supply chains that have finally begun to iron out the kinks left by the pandemic slowdown. "You'll see some diversion to other ports, but other ports are pretty busy," said Thrasher of Xcoal, a Pennsylvania-based coal trading firm that works with several suppliers. “There is a limit to how much you can redirect.”
Baltimore transports less than 2% of the world's seaborne coal, so the bridge collapse would have little impact on global prices, Thrasher said. He added that the coal coming out of Baltimore includes a lot of thermal coal going to India, which is used to generate electricity.
"This will cause some disruption or chaos from a supply chain perspective," he said. Thrasher said. "But the big question is whether the impact on India will be greater than any global impact."
India's annual coal requirement is more than 1 billion tons, and in the last fiscal year the country imported about 238 million tons of fuel, of which about 6% was shipped from the United States. Baltimore accounted for about 12 million tons of imports, according to a research note from research firm Energy Aspects.
The Energy Aspects note also predicted that marine traffic in Baltimore would be disrupted for a maximum of two or three weeks. Some coal shipments may be temporarily diverted to other ports, including Norfolk, Virginia, it said.
The supply disruptions will impact Asian coal markets more than European ones because most of the coal exported from the port , has a high sulfur content and is not suitable for European power plants, according to a note from commodity analytics company DBX.
Shares of companies that mine and transport coal in the United States fell on Tuesday. Shares of Consol Energy Inc. fell 6.8%, and shares of CSX Corp. - by 1.9%. The Consol Marine Terminal in the area of the bridge is used to load coal onto large ocean-going vessels, and the terminal is serviced by CSX.
