Baltimore bridge collapse forces freight changes

  • Spanish Market: Agriculture, Biofuels, Chemicals, Coal, Coking coal, Crude oil, Fertilizers, Metals, Oil products, Petrochemicals, Petroleum coke
  • 26/03/24

Vessel traffic in and out of the Port of Baltimore, Maryland, has been suspended indefinitely in the wake of a container ship collision early today that brought down the Francis Scott Key Bridge, an accident that will force the rerouting of coal, car and light truck shipments.

The prolonged closure of one of the largest ports on the US east coast could have a ripple effect on trade flows across much of the US, as shippers grapple for alternatives in the absence of a certain reopening timeline.

Search and rescue efforts are still ongoing in the Patapsco River, after the 116,851dwt Dali headed to Colombo, Sri Lanka, slammed into a bridge support. The crew had lost control of the vessel. The Dali is owned by Grace Ocean and managed by Synergy Marine Group.

The Maryland Port Administration said it does not know how long it will take for the shipping channel to be cleared and for traffic to resume. Shipping companies are bracing for a closure of at least two weeks, but many expect the clean-up effort could take significantly longer.

President Joe Biden vowed the federal government will provide whatever resources are needed to get the port "up and running again as soon as possible."

The port is a major trade hub for steam and coking coal, automobiles and scrap metal. Many market sources are still trying to determine whether the disruption will be dramatic enough to move prices.

But coal markets were already being affected today.

Baltimore is home to two key coal export terminals: eastern US railroad CSX's Curtis Bay Coal Piers and coal producer Consol Energy's Consol Marine Terminal. The facilities are upstream of the bridge, meaning ships will not be able to serve them until the route reopens.

The terminals handle thermal and coking coal from Northern and Central Appalachia. They have a combined export capacity of 34mn short tons (30.8mn metric tonnes). The two terminals loaded 2.4mn t of coal in February, up from 2.1mn t a year earlier, according to analytics firm Kpler, mostly exports to India and China.

An India-based trader said that the suspension of coal exports will probably raise prices in India, as brick kilns enter the peak production season in the summer. Buyers could look to petroleum coke as a substitute, but the higher sulphur content may not be appealing to some users despite the higher calorific value.

Prices for deliveries to northern Europe are also likely to rise given that the Netherlands, Germany and Belgium combined are the second-largest market for North Appalachian coal. April API 2 futures rose by $2/t to $113.30/t. The incident has added a "level of volatility [which] could have big implications," a European paper broker said.

The lack of information has prompted some coal producers to hold off on activating force majeure clauses in their contracts.

Curtis Bay is served only by CSX, while CSX and fellow eastern carrier Norfolk Southern serve Consol.

CSX said it is in contact with existing coal customers and contingency plans are being implemented. The railroad at this point intends to keep Curtis Bay open but will continue to assess the circumstances moving forward. Norfolk Southern did not respond to questions.

Some scheduled Baltimore coal exports may be redirected to the other three eastern US coal export terminals in Hampton Roads, Virginia, but such reroutings likely will entail increased costs.

Not all coal mines will be able to shift terminals. Such decisions will depend on available capacity in Hampton Roads. Exports from the three terminals in January reached a five-year high, signaling somewhat limited capacity.

Mine location and railroad access may also determine whether coal can be rerouted, an industry source said. But some producers do not have much of a choice about trying to send coal to Hampton Roads. They may need the cash so will be forced into a decision.

The producers most vulnerable to delays may be Consol and Arch Resources. Arch's Leer coking coal mine may be in the best position because it co-owns Dominion Terminal Associates in Hampton Roads with Alpha Metallurgical Coal Resources.

The sudden lack of export capacity could put a floor under US coal prices, which have mostly been falling since last year amid low domestic demand. The competition to replace Baltimore coal exports could prevent further cuts, another coal trading source said.

Metals sources say the accident will have only isolated effects on the global ferrous scrap market, but many market participants are still assessing the situation. The port is the 10th largest ferrous scrap export port in the US, and over the last five years an average of 44,000 metric tonnes/month of ferrous scrap was exported from Baltimore, according to US Department of Commerce data.

But the port closure is likely to affect other freight. Baltimore is the nation's top handler of automobile traffic.

Motor vehicles and parts accounted for about 42pc of all Baltimore port imports and 27pc of all exports, according to state data. The Port of Baltimore handled 847,158 cars and light trucks in 2023.

"It's too early to say what impact this incident will have on the auto business — but there will certainly be a disruption," said John Bozzella, chief executive of industry trade group Alliance for Automotive Innovation.

Dry bulk freight rates likely unaffected

Several sources told Argus Baltimore's closure is unlikely to have a major impact on dry freight rates despite short-term interruptions to coal transports.

"We are in the shoulder months with less demand for thermal coal," a shipbroker said, suggesting mild global temperatures means the collapse "may not have too much of an impact" on freight markets overall.

Vessel traffic in ports such as Charleston, South Carolina, and Savannah, Georgia, may increase on diversions from Baltimore.

Kpler identified 17 vessels that will likely be impacted because they are either in the Port of Baltimore or were expected to load there in the coming days.

Port of Baltimore coal terminals

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14/05/24

Saras sees diesel margin improvement later in the year

Saras sees diesel margin improvement later in the year

Barcelona, 14 May (Argus) — Italian independent refiner Saras said today it expects diesel margins to rise later in the year, boosting profits at its 300,000 b/d Sarroch refinery. The comapny said there has been a "drastic decline" in regional diesel margins since the first quarter of the year, caused by cargoes from the US arriving at the same time as supplies from east of Suez that had been delayed by taking the longer Cape of Good Hope route. This is not necessarily bad for Saras' profits, said the firm's chief operating officer Marco Schiavetti. "All these logistic de-optimisations are supporting diesel cracks in particular, volatility in the market is supportive for the business in general," he said. The company expects diesel margins to rise later in the year. Saras said today that some maintenance works on Sarroch's crude distillation units (CDU) would take place in the second quarter and again in the fourth quarter. There will also be works in both periods on the firm's adjacent IGCC power plant. Saras' prospective purchase by trading firm Vitol could close within a couple of months. Saras' chairman Massimo Moratti said there are "no obstacles" to the deal from Italian authorities, with the firm waiting on EU approval including regulations on antitrust law. Deputy chief executive Franco Balsamo said: "We do not have any disclosure on the expected end of the process, but in my point of view in a couple of months we should receive a green light from the EU." There has not yet been co-operation between Saras and Vitol regarding refinery operations, said Balsamo. "Vitol is one of the largest broker in this market so we have regular business with them when there are mutual economic conditions," he said. "But as far as any formal co-operation it is not the right time. We are waiting for all the necessary procedures." The company made a profit of €77.4mn ($83.5mn) in the January-March period, lower by 44pc from the first quarter of 2023. Profits were very similar to €76.6mn in the first quarter of 2022 when refining margins began rising following the Russian invasion of Ukraine at the start of February that year. Company crude throughput forecast has historically been changeable. But 2024 guidance remains the same as previous statements at 265,000-275,000 b/d. The firm said its first quarter crude gravity was 32.5°API almost identical to Argus ' assessment of the refinery slate . By Adam Porter Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

More Egyptian urea sold at $286/t fob for June loading


14/05/24
14/05/24

More Egyptian urea sold at $286/t fob for June loading

Amsterdam, 14 May (Argus) — Egyptian fertilizer producer Mopco has sold a further 25,000t of granular urea at $286/t fob for loading next month to a European market. The producer is now targeting $290/t fob. The deal follows business which emerged at a similar level today, with Mopco selling a total of 20,000t at $286/t fob to two trading firms, while fellow producer Alexfert sold 5,000t of granular urea at $287/t fob for June loading. Trading firms covering short sales across mainland Europe and Turkey have been driving these latest deals out of Egypt, with purchases taking place earlier in the week in the lower $280s/t fob. By Harry Minihan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

India's RCF seeks key NPS and NPK grades


14/05/24
14/05/24

India's RCF seeks key NPS and NPK grades

London, 14 May (Argus) — Indian fertilizer importer RCF has issued a tender to buy 50,000t each of 20-20-0+13S and 10-26-26, plus or minus 10pc of the respective quantities. The tender is to close on 16 May, and offers must be valid to 22 May. The tender, which requests loading by 20 June, is open only to suppliers with which RCF has long-term agreements. The minimum offer quantity is 25,000t, plus or minus 10pc. Potential suppliers can offer either or both products. RCF late last month floated a tender to buy two 50,000t lots of 20-20-0+13S. It received one offer — of 50,000t from a trading firm — at $362/t cfr duty unpaid. But the offer was around $17/t higher than the price at which Saudi producer Ma'aden recently sold the grade to another Indian importer, and RCF scrapped its tender. RCF has not received a cargo of key NPK grade 10-26-26 since early November 2023, Argus data show. By David Maher Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

HVO-Zulassung steht bevor


14/05/24
14/05/24

HVO-Zulassung steht bevor

Hamburg, 14 May (Argus) — Die Zulassung von HVO zum freien Verkauf an deutschen Tankstellen steht laut dem BMUV kurz bevor. Die Zahl der Tankstellen, an denen HVO bereits erhältlich ist, wächst. Eine Sprecherin des Bundesministeriums für Umwelt- und Verbraucherschutz (BMUV) bestätigte gegenüber Argus , dass die Zulassung von HVO durch die Veröffentlichung der Novelle der 10. Verordnung zur Durchführung des Bundes-Immissionsschutzgesetzes (10. BImSchV) bevorsteht. Die Novelle liegt dem Bundespräsidialamt zur Überprüfung vor, so eine Sprecherin des Amtes. Dies ist der letzte Schritt vor der Veröffentlichung im Bundesgesetzblatt. Unklar ist jedoch, ob sich die Veröffentlichung dadurch verzögern könnte, dass die Novelle des Saubere-Fahrzeuge-Beschaffungs-Gesetz zuerst veröffentlicht werden muss, was bisher noch nicht geschehen ist. Marktteilnehmer bereiten derweilen ihre Tankstelleninfrastruktur auf die Zulassung vor. Der Verein eFuelsNow e.V. verzeichnet etwa 150 Tankstellen in Deutschland, die schon HVO100 anbieten. In 2023 gab es in Deutschland laut Daten des Branchenverbands en2x etwa 14.500 Tankstellen, womit knapp 1 % aller Tankstellen bereits HVO führen. Die Tendenz ist dabei steigend; mehrere Anbieter haben bereits zusätzliche Standorte angekündigt. Der Großteil dieser Tankstellen befindet sich in Hessen, Baden-Württemberg, Bayern, Nordrhein-Westfalen und Niedersachsen. Einige Anbieter sind mittlerweile dazu übergegangen, HVO bereits vor der offiziellen Zulassung frei zu verkaufen, während andere Anbieter HVO weiterhin nur in geschlossenen Kundenkreisen über Clubs mit Zugangskarte verkaufen. Von Max Steinhau Senden Sie Kommentare und fordern Sie weitere Informationen an feedback@argusmedia.com Copyright © 2024. Argus Media group . Alle Rechte vorbehalten.

Brazil ups 2023-24 crop forecast to 295.4mn t


14/05/24
14/05/24

Brazil ups 2023-24 crop forecast to 295.4mn t

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