The collapse of the Francis Scott Key Bridge in Baltimore on March 26 has caused significant disruptions to the supply chain of coal exporters, impacting access to the nation's second-largest port for coal exports and forcing companies to find alternative routes for shipments.
The incident occurred when a ship leaving the Port of Baltimore collided with a central support of the bridge, blocking access to crucial coal export facilities operated by CSX and Consol Energy. These facilities, vital suppliers of coal to India, are now inaccessible due to the bridge collapse.
Ernie Thrasher, CEO of Xcoal Energy & Resources, estimated that coal exports from Baltimore could be blocked for up to six weeks. The removal of debris from the bridge is cited as a significant variable in determining how quickly safe access to the shipping channel can be restored.
Coal exports have grown increasingly important for the U.S. coal industry and global buyers amid declining domestic demand. Baltimore accounted for one-fifth of U.S. coal exports, with an estimated 28 million tonnes exported last year.
While some coal shipments initially destined for Baltimore may be rerouted to alternative terminals such as Lambert's Point in Norfolk, Virginia, it is unlikely to fully replace the export capacity disrupted at Baltimore.
The collapse trapped three cargo ships inside the port, further exacerbating the situation. These vessels, including two loading thermal coal for electricity generation, will remain stranded until the waterway reopens.
Consol Energy and CSX, operators of the affected terminals, have indicated uncertainty regarding the timeline for resuming normal operations. Consol Energy's stock price fell 6.8% in response to the incident.
While the global impacts of the blocked terminals are relatively limited compared to the effects on the U.S. and India, the situation underscores the vulnerability of supply chains to unexpected disruptions.
Despite the disruptions to coal exports, experts suggest that exports of liquefied natural gas (LNG) are unlikely to be significantly affected. Maryland's Cove Point LNG facility, the closest export terminal for LNG, is situated far from the collapsed bridge and is expected to experience no operational impacts.
(Writing by Alex Guo Editing by Harry Huo)
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