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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20/05/24

Australia’s cropping conditions mixed: GPA

Australia’s cropping conditions mixed: GPA

Sydney, 20 May (Argus) — Australia's cropping regions show an imbalance as the winter crop planting period progresses, according to the Grain Producers Australia (GPA) latest 2024 season update. The report, which collected perspectives from GPA representatives in different cropping regions, revealed how dryness in Western Australia (WA) and Southern Australia (SA) is in contrast to favourable soil moisture and rainfall levels in the east Australia cropping regions of Queensland, New South Wales (NSW) and Victoria. WA growers are continuing to dry sow crops awaiting a significant rainfall event or "break" to germinate their crops. While some rain had fallen in May, most of the WA grain belt remains dry. Planting decisions in WA were influenced by the lack of rainfall, anticipated yields and future prices, according to the GPA report. Some growers are considering reducing their canola crop as the future price per tonne was unappealing, while others had already cut back their intended crop because of a dry rainfall outlook until June and the cost of canola seed. Others have withheld canola planting as they wait for a material seasonal break. These perspectives are consistent with the Grain Industry Association of Western Australia's May crop report that projected canola area in 2024 would be down overall from 2023 because of dry conditions. The GPA report also stated anxiety among WA growers were heightened because of a relatively poor season last year, along with the ability of some growers to diversify income streams with a government decision to ban live sheep exports by May 2028. Northern and central western NSW had good rainfall and a positive start to the season, while growers in southern NSW were looking for rain to germinate dry sown crops. Victoria has good soil moisture for seeding, although one GPA member said access to some fertilisers was an issue for growers who wanted it on hand for winter. Queensland has had wet weather for its summer crop harvest. The sorghum harvest period, usually finished during February–March, according to GPA, was disrupted by heavy rainfall around Easter. This reduced crop quality and could potentially delay winter crop planting, according to a GPA member. The US Department of Agriculture crop calendar for Queensland indicates the typical planting period for winter crops of barley and wheat is May and April-July respectively. By Edward Dunlop Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Houston refiners weather hurricane-force winds: Update


17/05/24
17/05/24

Houston refiners weather hurricane-force winds: Update

Adds Calcasieu comment, update on flaring reporting Houston, 17 May (Argus) — Over 2mn b/d of US refining capacity faced destructive winds Thursday evening as a major storm blew through Houston, Texas, but the damage reported so far has been minimal. Wind speeds of up to 78 mph were recorded in northeast Houston and the Houston Ship Channel — home to five refineries with a combined 1.5mn b/d of capacity — faced winds up to 74 mph, according to the National Weather Service . Further South in Galveston Bay, where Valero and Marathon Petroleum refineries total 818,000 b/d of capacity, max wind speeds of 51 mph were recorded. Chevron's 112,000 b/d Pasadena refinery on the Ship Channel just east of downtown Houston sustained minor damage during the storm and continues to supply customers, the company said. ExxonMobil's 564,000 b/d Baytown refinery on the Ship Channel and 369,000 b/d Beaumont, Texas, refinery further east faced no significant impact from the storm and the company continues to supply customers, a spokesperson told Argus . Neither Phillips 66's 265,000 b/d Sweeny refinery southwest of Houston nor its 264,000 b/d Lake Charles refinery 140 miles east in Louisiana were affected by the storm, a spokesperson said. There was no damage at Motiva's 626,000 b/d Port Arthur, Texas, refinery according to the company. Calcasieu's 136,000 b/d refinery in Lake Charles, Louisiana, was unaffected by the storm and operations are normal, the refiner said. Marathon Petroleum declined to comment on operations at its 593,000 b/d Galveston Bay refinery. Valero, LyondellBasell, Pemex, Total and Citgo did not immediately respond to requests for comment on operations at their refineries in the Houston area, Port Arthur and Lake Charles. A roughly eight-mile portion of the Houston Ship Channel from the Sidney Sherman Bridge to Greens Bayou closed from 9pm ET 16 May to 1am ET today when two ships brokeaway from their moorings, and officials looked in a potential fuel oil spill, according to the US Coast Guard. The portion that closed provides access to Valero's 215,000 b/d Houston refinery, LyondellBasell's 264,000 b/d Houston refinery and Chevron's Pasadena refinery. Emissions filings with the Texas Commission on Environmental Quality (TCEQ) are yet to indicate the extent of any flaring and disruption to operations in the Houston area Thursday evening, but will likely be reported later Friday and over the weekend. Gulf coast refiners ran their plants at average utilization rates of 93pc in the week ended 10 May, according to the Energy Information Administration (EIA), up by two percentage points from the prior week as the industry heads into the late-May Memorial Day weekend and beginning of peak summer driving season. The next EIA data release on 22 May will likely reveal any dip in Gulf coast refinery throughputs resulting from the storm. By Nathan Risser Houston area refineries Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Brazil's Rio Grande do Sul reallocates gas supply


17/05/24
17/05/24

Brazil's Rio Grande do Sul reallocates gas supply

Sao Paulo, 17 May (Argus) — Natural gas supply in Brazil's Rio Grande do Sul had to be redistributed because of the historic floods in the state, with diesel potentially making its way back as an power plant fuel to leave more gas available for LPG production. Gasbol, the natural gas transportation pipeline that supplies Brazil's south, does not have capacity to meet demand from the 201,000 b/d Alberto Pasqualini refinery (Refap), state-controlled Petrobras' Canoas thermal power plant and natural gas distributors in the region, according to Petrobras' then-chief executive Jean Paul Prates said earlier this week. The Santa Catarina state gas distributor has adjusted its own local network to meet peak demand in neighboring Rio Grande do Sul via the pipeline transportation network. The Canoas thermal plant is running at its minimum generation at 150GW, with 61pc coming from its gas turbine. The plant was brought on line to reinstate proper power supply after transmission lines in the south were affected by the floods. Petrobras plans to use a diesel engine to increase power generation. The current approved fuel cost (CVU) for diesel in the Canoas plant is of R1,115.29/MWh. Petrobras is also operating Refap at 59pc of its maximum installed capacity, at 119,506 b/d. Heavy showers in Rio Grande do Sul since 29 April brought unprecedented flooding to the state, causing a humanitarian crisis and infrastructure damage. The extreme weather has left 154 people dead, 98 missing and over 540,000 people displaced, according to the state's civil defense. By Rebecca Gompertz Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Houston area refiners weather hurricane-force winds


17/05/24
17/05/24

Houston area refiners weather hurricane-force winds

Houston, 17 May (Argus) — Over 2mn b/d of US refining capacity faced destructive winds Thursday evening as a major storm blew through Houston, Texas, but the damage reported so far has been minimal. Wind speeds of up to 78 Mph were recorded in northeast Houston and the Houston Ship Channel — home to five refineries with a combined 1.5mn b/d of capacity — faced winds up to 74 Mph, according to the National Weather Service . Further South in Galveston Bay, where Valero and Marathon Petroleum refineries total 818,000 b/d of capacity, max wind speeds of 51 Mph were recorded. Chevron's 112,000 b/d Pasadena refinery on the Ship Channel just east of downtown Houston sustained minor damage during the storm and continues to supply customers, the company said. ExxonMobil's 564,000 b/d Baytown refinery on the Ship Channel and 369,000 b/d Beaumont, Texas, refinery further east faced no significant impact from the storm and the company continues to supply customers, a spokesperson told Argus . Neither Phillips 66's 265,000 b/d Sweeny refinery southwest of Houston nor its 264,000 b/d Lake Charles refinery 140 miles east in Louisiana were affected by the storm, a spokesperson said. There was no damage at Motiva's 626,000 b/d Port Arthur, Texas, refinery according to the company. Marathon Petroleum declined to comment on operations at its 593,000 b/d Galveston Bay refinery. Valero, LyondellBasell, Pemex, Total, Calcasieu and Citgo did not immediately respond to requests for comment on operations at their refineries in the Houston area, Port Arthur and Lake Charles. A roughly eight-mile portion of the Houston Ship Channel from the Sidney Sherman Bridge to Greens Bayou closed from 9pm ET 16 May to 1am ET today when two ships brokeaway from their moorings, and officials looked in a potential fuel oil spill, according to the US Coast Guard. The portion that closed provides access to Valero's 215,000 b/d Houston refinery, LyondellBasell's 264,000 b/d Houston refinery and Chevron's Pasadena refinery. By Nathan Risser Houston area refineries Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japanese bank Mizuho boosts support for H2, ammonia


17/05/24
17/05/24

Japanese bank Mizuho boosts support for H2, ammonia

Tokyo, 17 May (Argus) — Japanese bank Mizuho Financial aims to provide ¥2 trillion ($12.8bn) in financial support for domestic and overseas cleaner fuel projects by 2030 to support Japan's plan to build a hydrogen supply chain. Private-sector Mizuho is offering financing to low-carbon hydrogen, ammonia and e-methane projects related to production, import, distribution and development of hydrogen carriers. Mizuho said it has in the past offered project financing for large-scale overseas low-carbon hydrogen and ammonia manufacturing projects, as well as transition loans. Japan is focusing on cleaner fuel use in the power sector and hard-to-abate industries, as part of its drive to reach net zero CO2 emissions by 2050. Japanese firms are getting involved in overseas hydrogen projects because domestic production is bound to be comparatively small and costly. They are looking to co-fire ammonia at coal-fired power generation plants to cut CO2 emissions and examining use of the fuel as a hydrogen carrier . Japanese companies have also partnered with several overseas firms on e-methane. Mizuho has to date offered $1bn for cleaner fuel projects. The bank has set a goal to accelerate the setting up of a clean fuel supply chain by addressing the financial challenge faced by projects requiring large investments. Mizuho has attempted to help Japan's decarbonisation push by tightening biomass and coal financing policies. Mizuho has also stopped investing in new coal-fired power projects, including existing plant expansions. The bank has a plan to reduce the ¥300bn credit available for coal-fired power development projects by half by the April 2030-March 2031 fiscal year and to zero by 2040-41. By Nanami Oki Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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