Baltimore bridge collapse disrupts US coal export hub

The collapse of the Francis Scott Key Bridge in Baltimore severed US coal producers from typical export routes, according to industry experts.

Baltimore is a US hub for coal shipments. In the fourth quarter of 2023, 7.0 million metric tons of coal, or 28.9% of US exports, passed through the mid-Atlantic city, according to S&P Global Market Intelligence data.

A cargo ship rammed into the bridge early March 26, causing much of the 1.6-mile-long structure to collapse into the Patapsco River. Two people who plunged into the river were rescued. At least six people are unaccounted for, Maryland Transportation Secretary Paul Wiedefeld said at a news conference later in the day.

Rescue operations and the bridge's crumbled ruins blocked ships from entering or leaving Baltimore's inner harbor, which includes two large coal terminals.

"The issue is quite significant for the international coal seaborne market with supply of [Northern Appalachia] coal moving out of Baltimore terminals severely disrupted," Pranay Shukla, head of dry bulk freight and commodities research at S&P Global Commodity Insights, said in an email.

Two coal terminals are trapped behind the wreckage: Consol Marine Terminal, which is owned by coal producer Consol Energy Inc., and rail operator CSX Corp.'s Curtis Bay Piers.

Baltimore was the second-largest port for coal exports in the fourth quarter of 2023 and the largest port for coal shipped to Asia, according to Market Intelligence. Several US coal mining companies, including Consol and Arch Resources Inc., depend on the terminals to ship coal and sell their product to international markets, analysts said.

Other metals and minerals, including fertilizers, pass through Baltimore, but it was not immediately clear how much of an impact the bridge collapse would have on these materials.

Shipments halted

Consol confirmed March 26 it could not ship coal through its Marine Terminal.

"At this moment, we do not have a definitive timeline of when vessel access or normal operations will resume," Consol said in a statement. "We are looking at all available options to us to minimize or address direct and indirect impacts to the company and its operations."

Other shipping companies said traffic to and from the inner harbor was at a standstill and that they are looking to alternative cargo routes. Ports America, a shipping terminal operator, told Commodity Insights that the collapse of the Key Bridge obstructed access to the company's Seagirt and Dundalk terminals.

"As a result of the channel closure and to maintain the flow of cargo, we expect temporary diversions to other nearby ports which will be supported by our operations," the company said in an emailed statement.

Scant route options

For coal companies, alternative routes are hard to come by and have little excess capacity, analysts said.

If coal companies need to ship via other routes, they could try to send coal to the Hampton Roads terminal in Virginia or further south through ports on the Gulf of Mexico, analysts said, but space is tight and further confounded by the need for special coal handling facilities.

Baltimore's 2023 coal exports included 8.2 million metric tons of metallurgical coal and 17.1 million metric tons of thermal coal, according to Commodity Insights coal experts.

The port imports only a small proportion of potash to the US, said Kwadjo Ahodo, a potash analyst at Commodity Insights.

The impact on aluminum shipments will be minimal, Jean Simard, president and CEO of the Aluminum Association of Canada, said in an email. There is available aluminum billet capacity in North America to offset potential import delays, said Simard, who is well versed on North America's aluminum market.

Time sensitive

A pressing issue for companies hemmed in by the bridge collapse is how long the inner harbor will remain closed. A protracted disruption could become problematic for shipping and cash flows, Forster said.

Still, Baltimore could push to clear the wreckage as quickly as possible.

The harbor's economic importance means that after search and rescue operations finish, getting ships moving again will become a priority, Lucas Pipes, an analyst at B. Riley Financial, said in a March 26 note.

"As such, we believe that a closure of the shipping channel for several weeks is unlikely," Pipes said.

The Maryland Port Administration and Maryland Transportation Authority could not be reached for comment.