The Baltimore bridge collapse is set to disrupt global trade, including metals, fossil fuels and grains.
The collapse of a major bridge in Baltimore on Tuesday is expected to halt the port’s coal exports for up to six weeks, potentially obstructing the transport of around 2.5 million tons of coal, according to Ernie Thrasher, the CEO of Xcoal Energy & Resources LLC.
Baltimore is the second-largest terminal for coal exports in the US, which shipped about 74 million tons of coal globally last year. The disruption at a key coal hub could disrupt global energy supply chains, which have been gradually recovering from slowdowns caused by the pandemic.
While some coal shipments may be diverted to other ports, Thrasher noted that other ports are already operating at near-full capacity, limiting the extent of potential diversions.
However, Baltimore accounts for less than 2% of global seaborne coal trade, so the impact on global coal prices is expected to be minimal. Thrasher mentioned that much of the coal shipped from Baltimore is destined for India, where it is used for electricity generation.
While the bridge collapse will cause some disruption in supply chains, the primary concern is its impact on India, which has a significant annual coal demand and imports a substantial amount of coal, including from the US.
Energy Aspects, an analytics firm, predicted that marine traffic in Baltimore would be disrupted for a maximum of two to three weeks. Some coal shipments may be redirected to other ports, such as Norfolk, Virginia, to mitigate the impact.
The disruption in coal supply is expected to have a greater impact on Asian markets than European markets, as much of the coal exported from Baltimore has high sulfur content, making it less suitable for European power stations, according to a note from commodity analytics firm DBX.
