Recent days have seen a notable uptick in coal prices after the Port of Baltimore was forced to shut down following the collapse of the Francis Scott Key Bridge, severing crucial access to many port facilities.
The price of U.S. coal surged by 0.6% on Thursday, reaching $113.25 per ton. Concurrently, the Range Global Coal ETF COAL climbed 0.7% to $22.81, marking a 2.7% increase over the last two trading sessions.
Consol Energy Inc CEIX stands as one of the major exporters utilizing the port’s coal terminal. The Pennsylvania-based company affirmed its commitment to collaborating with port authorities in endeavors to restore terminal access, albeit expressing uncertainty regarding a definitive timeline for resuming normal operations.
In the aftermath of the incident, Consol’s shares initially plummeted by nearly 7% on Tuesday but demonstrated signs of recovery in subsequent trading sessions.
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Major Coal Export Hub Disrupted
As the U.S. Energy Information Administration (EIA) highlights, the port in Baltimore serves as the nation’s second-largest coal exporting hub, accounting for 28% of total coal exports in 2023, with a significant portion destined for Asian markets.
Warning of potential export volume disruptions, the EIA cautions, “The interruption in operations in Baltimore may affect the volume of exports this year.”
Situated advantageously, Baltimore’s coal terminal is strategically positioned to receive coal from the northern Appalachian fields, catering to both premium-quality metallurgical coal for steel production and smelting, as well as steam coal for power station usage.
Historically, steam coal shipments from Baltimore averaged 12 million tons between 2019-22, surging to 19 million tons in 2023 due to heightened demand from Asia, notably India. The EIA underscores the presence of alternative nearby ports, such as Hampton Roads, which offer additional export capacity, albeit subject to factors like coal quality, pricing, and logistical arrangements.
Impact on Metal Imports
Beyond its role in coal exports, Baltimore serves as a pivotal destination for U.S. imports, notably playing host to cobalt shipments that constitute over half of the total arrivals.
Additionally, Baltimore emerged as the third-largest recipient of unwrought primary aluminum imports last year.
Reflecting supply chain challenges, aluminum futures witnessed a 2% spike on Thursday, aligning with disruptions across the market. The iShares U.S. Basic Materials ETF IYM registered a 2.1% gain over recent trading sessions, as delays are expected for tin, copper, and zinc shipments with other ports anticipated to absorb excess capacity issues.
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