Coal prices are witnessing a significant surge in the global market, driven by concerns over reduced supply following the collapse of the Francis Scott Key Bridge in Baltimore, United States (US). This incident, occurring on March 26, 2024, has sent ripples through the coal industry, impacting key players and trade routes.
The price of ICE Newcastle coal for April contracts closed at US$132 per ton on Thursday (March 28, 2024), marking a 0.69% increase and extending the rally for four consecutive trading days. The cumulative gain over this period stands at an impressive 6.02%, reflecting the severity of the supply disruption.
The collapse of the Francis Scott Key Bridge, resulting from a collision with a giant cargo ship, has raised concerns about the continuity of coal shipments from the US, one of the world's largest exporters. Several coal companies have already reported disrupted shipments and potential delays, with notable impacts on key export hubs like the Port of Baltimore.
According to data from the Energy Information Administration (EIA), the Port of Baltimore ranks as the second-largest coal export hub in the US, contributing 28% of coal exports. With an average of 20 million short tons per year during 2021-2023, and reaching 28 million short tons in 2023, the port plays a crucial role in global coal trade.
Major coal companies situated in Baltimore, such as CSX and CONSOL Energy, have also felt the repercussions of the bridge collapse. CSX owns the Curtis Bay coal dock near the affected bridge, while CONSOL Energy has reported delays in ship access to its terminal at the port.
The severity of the situation has led industry experts to predict potential disruptions lasting up to six weeks, significantly impacting coal exports from Baltimore. However, some believe that the global impact may be minor, with India expected to bear the brunt due to its heavy reliance on imported coal for power generation.
While Ernie Thrasher, CEO of Xcoal Energy & Resources LLC, anticipates chaos in the supply chain, he emphasizes the broader implications for India rather than the global market. Conversely, Energy Aspects suggests a shorter disruption period of two to three weeks, with potential redirection of shipments to other ports like Norfolk, Virginia.
As the coal industry grapples with the aftermath of the bridge collapse, stakeholders are closely monitoring developments to assess the full extent of the impact on supply chains and global energy markets.