Domestic coal market sees no immediate impact from Port of Baltimore closure

The closure of the Port of Baltimore following the collapse of the Francis Scott Key Bridge has temporarily halted all shipping traffic, including about 28% of US coal exports, the US Energy Information Administration said March 28.

The closure, however, is not likely to have a significant impact on physical coal pricing because end-users of Northern Appalachia coal, like brick kilns in India, are oversupplied, some thermal coal market participants told S&P Global Commodity Insights.

At the same time, other market participants said prices may see some short term support as buyers seek to replace NAPP flows. Most surveyed by S&P Global after the bridge collapse pointed to low demand as a moderating factor against higher prices.

FOB Baltimore coal prices have moved less than 1% since the bridge collapse March 26, Platts assessments showed.

Platts, a part of S&P Global Commodity Insights, assessed FOB Baltimore 6,900 kcal/kg NAR coal at $82.35/st March 27, up 75 cents on the session, based on market fundamentals and broker indications of value at $77.06/mt and $81/mt, tested in the market through 11:30 am ET. FOB Baltimore 6,900 kcal/kg NAR, at $82.35/st March 28, was flat on the session, based on market fundamentals and broker indications of value at $78.26/mt and $81/mt tested in the market through 11:30 am ET.

US over-the-counter coal prices have been similarly unaffected. Central Appalachia 12,500 Btu/lb rail coal slid 25 cents to $70.25/st May 27, and was unchanged March 28.

Coal for power generation

Steam coal, which used mostly for electric power generation and industrial heating, is the dominant type of coal exported from the Port of Baltimore.

"Those shipments averaged around 12 million st from 2019 to 2022 before surging to 19 million st in 2023," the EIA said. "Exports of metallurgical coal from Baltimore, or that used as a raw material in steel production, also are important, ranging from 6 million st to 10 million st from 2019 to 2023."

The top recipient of US steam coal shipped from Baltimore by far over the past five years has been India, whose brick manufacturing industry has been a major customer, according to the EIA. Other major recipients for steam coal from Baltimore include several European countries that are reached by ports in the Netherlands. Smaller markets include customers in the Dominican Republic, Canada, and Egypt.

"An attractive feature of the Port of Baltimore is its proximity to the northern Appalachia coal fields in western Pennsylvania and northern West Virginia," the EIA said. "Mines in this region produce both premium-quality metallurgical coal and steam coal with a high heat content."

Port of Baltimore coal exports

The Port of Baltimore is the second-largest exporting hub for US coal, second only to Hampton Roads in Virginia.

"In three of the past five years, annual coal exports from the Port of Baltimore totaled around 20 million st, with the only exception occurring in 2020, when reaction to the COVID-19 pandemic dampened coal demand worldwide," the EIA said.

Exports from Baltimore surged to 28 million st in 2023, mainly from growing demand for US coal in Asia, according to the EIA.

"Even before the port's closure, we were expecting much slower growth in total US coal exports in 2024, of just 1%," the EIA said. "The interruption in operations in Baltimore may affect the volume of exports this year."

The Port of Baltimore has two full-service terminals that receive, store, and load coal onto ocean-going vessels:

• the Curtis Bay Coal Piers served by the CSX Railroad
• the CONSOL Energy Baltimore Marine terminal served by both the CSX and Norfolk Southern Railroads