Baltimore opens third temporary shipping channel

  • Spanish Market: Agriculture, Coal, Freight, Metals
  • 22/04/24

A third temporary shipping channel has opened at the Port of Baltimore to allow more vessel traffic around the collapsed Francis Scott Key Bridge.

Located on the northeast side of the main channel, the new passage has a controlling depth of 20-ft, a 300-ft horizontal clearance, and a vertical clearance of 135-ft.

When combined with two other temporary channels opened earlier this month the port should be able to handle "... approximately 15 percent of pre-collapse commercial activity," said David O'Connell, the federal on-scene coordinator.

The main shipping channel of the Port of Baltimore — a key conduit for US vehicle imports and coal exports — is expected to be reopened by the end of May, the Maryland Port Administration said earlier this month.

The bridge collapsed into the water late last month when the 116,851dwt container ship Dali lost power and crashed into one of its support columns. Salvage teams have been working ever since to remove debris from the water and containers from the ship in order to clear the main channel.


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03/05/24

Heavy rainfall floods Brazil's Rio Grande do Sul

Heavy rainfall floods Brazil's Rio Grande do Sul

Sao Paulo, 3 May (Argus) — Brazil's southern Rio Grande do Sul state continues to flood after heavy rainfall since 29 April, leading the government to declare an emergency yesterday. The highest volumes reached the central areas of Rio Grande do Sul, with cities receiving rainfall of 150-500mm (6-20 inches), regional rural agency Emater-RS data show. The monitoring station of Restinga Seca city, in the center of the state, recorded rainfall of about 540mm. Rainfall in Rio Grande do Sul overall surpassed 135mm in most of the state, according to the US National Oceanic and Atmospheric Administration (NOAA). Meanwhile, dry weather prevailed in other Brazilian regions. NOAA expects rainfall to abate in the next week, but adverse weather conditions are set to remain. As of today, 154 sections of 68 highways were totally or partially blocked, according to the state's emergency service. The 100MW 14 de Julho hydroelectric plant also partially ruptured . The Rio Grande port has not suspended operations, but handling is slower. Despite the heavy rainfalls, demurrage rates and waiting queues for docking and unloading were not altered. Demurrage rates were stable at $1/metric tonne (t) and the total cost for handling fertilizers remained at $19/t. But market participants expect the situation to change in the coming days, which may increase demurrage rates. If the rain does not stop and the level of the Guaiba River continues to rise, some areas in the port are likely to flood in the coming days, as is the case in part of the Porto Alegre port. Amid slower cargo release, logicitical difficulties and the already-low demand for fertilizer transport services, fertilizer freight rates on the Rio Grande-Dourados route, monitored weekly by Argus , fell by R20/t ($4/t), on average, to R225-250/t. Excessive rainfall to damage 2023-24 soybean crop Rio Grande do Sul is harvesting its 2023-24 soybean crop, set to be the second largest in the country this season. Works reached 76pc of the state's expected acreage by 2 May, posting an weekly advancement of 10 percentage points despite the excessive rainfall, according to the rural agency Emater-RS. Farmers seized shorter windows of more favorable weather — or when rainfall subsided — to intensify field activities, especially in areas expected to register higher yields and that were not deeply affected by a drought earlier in the year. The moisture levels of grains harvested are considered above average and will require more investment in their drying processes. Some areas reported premature germination and plant decay because of the humidity excess. Emater-RS maintains the state's average yields estimated at 3,329 kg/hectare, with recent results remaining within prior projections, according to the agency's weekly report released on 2 May. Thus, soybean production in Rio Grande do Sul is still set to reach a record 22.2mn metric tonnes (t). But market participants agree that forecasts for the state may be revised down in the next weeks, as field surveys begin to accurately assess the excessive rainfall's total damages. By João Petrini, Maria Albuquerque and Nathalia Giannetti Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Brazil hydroelectric dam bursts under record rains


03/05/24
03/05/24

Brazil hydroelectric dam bursts under record rains

Sao Paulo, 3 May (Argus) — Brazilian power generation company Companhia Energetica Rio das Antas (Ceran) found a partial rupture in its 100MW 14 de Julho hydroelectric plant following record precipitation in Rio Grande do Sul state. Flooding from the record rains has left 37 dead and forced more than 23,000 people out of their homes, causing widespread damage across the state, including washed out bridges and roads across several cities. Ceron reported that the dam of the hydroelectric plant on the Antas River suffered a rupture under the heavy rains and the company implemented an emergency evacuation plan on 1 May. Ceron's 130MW Monte Claro and 130MW Castro Alves plants are under intense monitoring, the company said in a statement. Rio Grande do Sul state governor Eduardo Leite declared a state of emergency and the federal government promised to release funding for emergency disaster relief. Leite said the flooding will likely go down as the worst environmental disaster in the state's history. Brazil's southernmost state along the border with Argentina has been punished by record precipitation over the past year owing to the effects of the strong El Nino weather phenomenon, according to Rio Grande do Sul-based weather forecaster MetSul Meteorologia. Brazilian power company CPFL Energia controls Ceran with a 65pc equity stake. Energy company CEEE-GT, which is owned by steel manufacturer CSN, owns another 30pc, and Norway's Statkraft owns the remaining 5pc. The state had declared a state of emergency as recently as September 2023 because of unusually heavy rains that resulted in the death of more than 30 people. Weather forecasters expect El Nino conditions to abate in the coming months over the eastern Pacific. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Brazil's Gerdau eyes special steel mill in Mexico


03/05/24
03/05/24

Brazil's Gerdau eyes special steel mill in Mexico

Sao Paulo, 3 May (Argus) — Brazilian steelmaker Gerdau is considering building another steel plant in Mexico as it seeks to expand its footprint in the country. The company started a feasibility study for the construction of a special steel unit that would have a production capacity of up to 600,000 metric tonnes (t)/yr, chief executive Gustavo Werneck said today. The move follows an optimistic outlook for the country's automotive industry and increased nearshoring — where companies move production closer to the US to tackle supply chain snarls seen during the pandemic. "Important players in the automotive industry, including current Gerdau customers, are expanding their operations to Mexico, which is becoming one of the most relevant countries in the production of automotive parts," Werneck said on a LinkedIn post. He did not give financial details. Gerdau's first quarter crude steel production in North America fell by 2.8pc , but it posted 3.3pc output growth in its special steel business — which includes operations in Brazil and US — mainly driven by automobile production in Brazil, it said. Mexico's auto sales to the US were 0.9pc higher year-on-year in March and first quarter auto exports rose by 1.9pc from the same period of 2023. Gerdau operates two mills in Mexico with a combined nameplate capacity of 1.5mn t/yr. By Carolina Pulice Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US job growth nearly halved in April: Update


03/05/24
03/05/24

US job growth nearly halved in April: Update

Adds services PMI in first, fifth paragraphs, factory PMI reference in sixth paragraph. Houston, 3 May (Argus) — The US added fewer jobs in April as the unemployment rate ticked up and average earnings growth slowed, signs of gradually weakening labor market conditions. A separate survey showed the services sector contracted last month. The US added 175,000 jobs in April, the Labor Department reported today, fewer than the 238,000 analysts anticipated. That compared with an upwardly revised 315,000 jobs in March and a downwardly revised 236,000 jobs in February. The unemployment rate ticked up to 3.9pc from 3.8pc. The unemployment rate has ranged from 3.7-3.9pc since August 2023, near the five-decade low of 3.4pc. The latest employment report comes after the Federal Reserve on Wednesday held its target lending rate unchanged for a sixth time and signaled it would be slower in cutting rates from two-decade highs as the labor market has remained "strong" and inflation, even while easing, is "still too high". US stocks opened more than 1pc higher today after the jobs report and the yield on the 10-year Treasury note fell to 4.47pc. Futures markets showed odds of a September rate cut rose by about 10 percentage points to about 70pc after the report. Services weakness Another report today showed the biggest segment of the economy contracted last month. The Institute for Supply Management's (ISM) services purchasing managers index (PMI) fell to 49.4 in April from 51.4 in March, ending 15 months of expansion. The services PMI employment index fell to 45.9, the fourth contraction in five months, in today's report. Readings below 50 signal contraction. On 1 May, ISM reported that the manufacturing PMI fell to 49.2 in April, after one month of growth following 16 months of contraction. In today's employment report from the Labor Department, average hourly earnings grew by 3.9pc over the 12 month period, down from 4.1pc in the period ended in March. Job gains in the 12 months through March averaged 242,000. Gains, including revisions, averaged 276,000 in the prior three-month period. Job gains occurred in health care, social services and transportation and warehousing. Health care added 56,000 jobs, in line with the gains over the prior 12 months. Transportation and warehousing added 22,000, also near the 12-month average. Retail trade added 20,000. Construction added 9,000 following 40,000 in March. Government added 8,000, slowing from an average of 55,000 in the prior 12 months. Manufacturing added 9,000 jobs after posting 4,000 jobs the prior month. Mining and logging lost 3,000 jobs. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US met coal suppliers expect belated supply tensions


03/05/24
03/05/24

US met coal suppliers expect belated supply tensions

London, 3 May (Argus) — US coking coal prices have so far brushed off any impact of the collapse of the Francis Scott Key bridge in Baltimore on 26 March and the subsequent disruption of vessel traffic via the Port of Baltimore. Suppliers such as Arch Resources and Blackhawk that utilise the Baltimore shipping route have sought effective alternative arrangements so far and buyers have been largely comfortable despite some delays in laycans. Other suppliers such as Northern Appalachia's largest producer, Consol Energy's Bailey mine , which is a key supplier to Atlantic end-users, have faced more challenges, market participants suggest. The decline in fob Australia coal prices from last year's highs amid improved supply availability has also weighed on prices. The Argus assessed premium low-volatile coking coal fob Australia price was at $242.80/t on 3 May, largely unchanged from $254/t on 26 March after reaching a low of $224/t on 8 April. The US east coast prices have followed a similar trajectory, with low-volatile fob US east coast at $215/t today down from $220/t on 26 March after falling to a low in April. Low European demand has been one of the reasons behind the tepid response to coking coal shipment delays from the US. But with expectations of at least some recovery in the second half of 2024 and still no firm date on when the Baltimore traffic will return to normal, some US suppliers suggest coking coal prices may face some upward pressure later this year. Luxembourg-based steelmaker ArcelorMittal has kept its apparent steel demand outlook in Europe unchanged for 2024, expecting a growth of 2-4pc on the year . European steel association Eurofer downgraded its apparent steel consumption outlook for 2024 again , to 3.2pc from a previous forecast of 5.6pc, owing to worsening geopolitical tensions, economic uncertainty, energy prices, inflation and higher interest rates. But this would still be an improvement from a 9pc fall in steel consumption in 2023. There is also optimism among US coal suppliers that Brazil may be a source of renewed demand in the coming months with domestic steel production expected to improve. The Brazilian government is due to increase taxes for some imported steel products after facing pressure from the domestic steel industry to apply tariffs on imports, in particular on Chinese steel. Taxes will be increased to 25pc on 11 steel products — mainly flat rolled — contingent on such import levels exceeding prescribed quotas, the trade ministry's committee on foreign commerce, Gecex/Camex, said. Brazil's crude steel output reached 31.9mn t in 2023, down by 6.5pc on the year, World Steel Association data show. In the US, the fall in seaborne met coal prices also points to potential consolidation in the sector and the possibility of supplies tightening down the road. Industry participants highlight that some of the small and mid-sized mining operations that have emerged in the past two years amid a strong price environment are struggling. Bens Creek Group, which operates the Bens Creek Mining project in West Virigina with around 30,000-35,000st (27,200-31,800t) per month of coking coal output, filed for Chapter 11 bankruptcy in April. The year-to-date average price of high-volatile A for 2024 stands at $242.62/t fob Hampton Roads and is estimated to be above production costs for some of these mines. In 2022, high-volatile A prices averaged $347.81/t fob Hampton Roads, driven by a combination of market concerns over the Russia-Ukraine conflict and supply disruptions in Australia. While Russian coking coal remains available and competitively priced in the market, in particular a key supply source for China, US sanctions will continue to put pressure on major coal importers such as India and South Korea to reduce their Russian imports. The US announced fresh sanctions against Russian coal producer Sibanthracite's group of companies earlier this week. By Siew Hua Seah Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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