The Baltimore Bridge crisis has opened up a brief opportunity for Australian coal exporters to fill a significant gap in imports of coal from India, the coal needed for brick brands in the world’s most populous country.
The U. S. Energy Information Administration(EIA) states that in 2023 about 14 million tonnes of thermal coal were shipped to Indian buyers from Baltimore and that the disappearance of this tonnage will have an effect on the balance between supply and demand in the Asian and Indian Ocean markets. . on costs if this persists.
Seven million tonnes of metallic coal have been sold to Japanese and Asian markets, such as South Korea, and Australian exporters will be able to make up those shortfalls very easily, if only for one or three months.
Companies such as Glencore, BHP, Stanmore, Whitehaven and Yancoal could simply be potential suppliers.
Thermal coal futures prices in Newcastle (the main price point for high-quality smoldering coal) recorded prices from US$6 per tonne last week to around US$132 to US$134 per tonne with a gain of more than 5%, all after the container. The shipment rolled across the deck of Baltimore Harbor.
The EIA said in a note Thursday that “Baltimore is guilty of a huge percentage of coal shipments to the rest of the world, with India being a prominent destination. A prolonged port outage could lead to a surprise at the source that would spill over into Asia and this could potentially have repercussions across global supply chains. “
During the Easter holiday, there are reports of Indian investors seeking tons of emergency from Indonesia and Australia.
A handful of Australian companies produce high-quality thermal charcoal that Indian brick brands and some other consumers buy in the United States. Indonesia may barely supply it, but its coal is widely sold to China and is of lower quality (and at a lower price). than U. S. coal.
Indian buyers would buy from neighboring Indonesia if it were a question of price, but the more expensive U. S. (and Australian) thermal coals are of higher quality and less polluting.
Baltimore is home to two coal export terminals, one owned by railroad giant CSX and Consol Energy’s mining subsidiary, Consolidated Coal.
Both terminals are inside the port and the collapsed bridge (due to Dali’s 90,000-ton container hitting a pier) can’t serve the markets.
This will remain the case until the port reopens. In the meantime, coal may be diverted to close Hampton Roads/Norfolk, but this will take time and will increase prices and depend on port capacity.
Baltimore is the second largest coal export center in the United States, accounting for 28% of total coal exports in 2023 and second to Norfolk, Virginia, also known as Hampton Roads.
After shipping about 20 million tons a year in 2022, Baltimore’s exports surged to 28 million tons last year, “primarily due to growing demand for U. S. coal in Asia,” according to the EIA.
In total, 19 million tons of thermal coal were exported to Baltimore, 14 million tons to India, and the rest to Europe and smaller markets. The rest is coking coal for the metal industry, basically in Asia, passing through Japan and then Europe.
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