Baltimore bridge collapse seen impacting US East Coast metals, city's port

The collapse of Baltimore's Francis Scott Key Bridge, after being struck by a container ship early March 26, is potentially disruptive to container ships carrying imports of base metals and dry bulk carriers in metallurgical coal trades passing through the Maryland port, which is a major hub for warehousing and the transshipment of commodities on the US East Coast.

"Vessel traffic into and out of the Port of Baltimore is suspended until further notice," the Maryland Port Administration said in an update posted to its website. "This does not mean the Port of Baltimore is shut down. We are still processing trucks inside of our terminals."

According to port administration, Baltimore handled a record volume of 1.1 million twenty-foot equivalent units of containers in 2023.

At 8 am ET (1200 GMT), some 14 commercial vessels, including the Singapore-flagged Dali, which struck the bridge, were docked at jetties within the Baltimore port area, of which four were laden and 10 were in ballast, according to S&P Global Commodities at Sea.

"All lanes closed both directions for incident in I-695 Key Bridge," Maryland Transportation Authority said on X, formerly known as Twitter, following the collapse of the bridge. "Traffic is being detoured."

Baltimore is a key hub for the warehousing of base metals such as aluminum, copper, and zinc in addition to ferrolloys. The port also handles the most road vehicles of any terminal in the US in addition to large volumes of agricultural commodities, including coffee and sugar.

"This is a major disaster and will create significant problems on the US East Coast for US importers and exporters," wrote shipping consultant Lars Jensen on Linkedin following the emergency. "The bridge collapse will mean that for the time being it will not be possible to get to the container terminals -- or a range of the other port terminals -- in Baltimore."

Jensen added that freight would have to be rerouted to other East Coast ports if the Baltimore terminals are closed because of the disaster and cargo warehoused in the area would be unable to leave.

Bridge collapse

The Singapore-flagged Dali, which caught fire during the collision, had a capacity of 9,962 TEUs. It was time chartered by Maersk and managed by Synergy Marin, according to data from S&P Maritime Intelligence Risk Suite.

"We can confirm that the container vessel 'DALI,' operated by charter vessel company Synergy Group, is time chartered by Maersk and is carrying Maersk customers’ cargo. No Maersk crew and personnel were onboard the vessel," Maersk said in a statement, adding that it was closely following investigations.

The 1.6 mile-long bridge straddled the Patapsco River and marked the outermost crossing of the Baltimore Harbor area.

According to data from PIERS, trade flow analytics tool within S&P Global, Baltimore port held just 4% share of the total trade volumes on the East Coast compared with other major regional ports like New York, Savannah, Charleston and Norfolk. New York held the highest share at near 38%.

Some sources fear a temporary spike in East Coast shipping rates in the light of the bridge collapse.

"Shippers are anticipating a labor strike [on the US East Coast] due to labor union contract negotiations, so they are moving more of the shipments to [the US West Coast] and then trans-load to Midwest and USEC," said Peter Sundara, head of Global Ocean Freight at Visy. "And I believe the latest bridge collapse in Baltimore is going to temporarily increase USEC rates."

The top two carriers calling at Baltimore have been MSC and Maersk, with furniture being the most moved manufactured goods out of China.

Platts, part of S&P Global Commodity Insights, assessed PCR 25 Southeast Asia to East Coast North America at $4,500/FEU and PCR23 Southeast Asia to West Coast North America at $3,500/FEU on March 22, both unchanged from the previous session.

Impact to metals trade

The US imported 10.3 million kg of cobalt products in 2023 with 5.43 million kg, over half of total shipments, flowing into Baltimore, according to US Commerce Department data.

Baltimore's ports were also the third-largest destination for US imports of unwrought primary aluminum in 2023, registering over 461,600 mt in shipments and accounting for 12% of total aluminum imports.

Two cobalt traders said they had stopped offering spot cobalt in the US, as a result of the disruption to the port at Baltimore.

"We've already had [US] customers calling off prompt cobalt this morning -- small lots of one, two and 10 tons and calling off [for early delivery]," said a trader.

Traders have said the disaster has come at a time when port inventories of cobalt in Baltimore were already very tight in the face of strong demand for alloy and mid grades, ongoing container shipping delays because of the Suez Canal crisis and delays in getting containers customs cleared in Baltimore.

"We can't do it until the next ship arrives," the trader added. "On alloy grade, we're totally sold out. That's the first time ever we've had no stock [in the US]," the trader said.

The trader said his next ship was not due to arrive until mid-April and he was uncertain as to whether it would go to Baltimore, or elsewhere on the US East Coast.

A second trader also said he had stopped offering spot cobalt from Baltimore, having concluded a sale March 22 for next day delivery. He said he did not know whether he could get trucks in and out of warehouse locations at the port.

A message from warehouse operator C. Steinweg in Baltimore, told customers to expect "significant delays in loading and shipping times."

The second trader said nickel shipments would be affected, as would tin, copper, aluminum, zinc and lead. He said some shipping could be diverted to New York or Norfolk, Virginia, and some may also end up being brought in through Houston.

The trader said tin from Bolivia was likely to end up all being shipped to Long Beach, California, but could also go to Portland, Oregon.

The first trader said the US was totally import-dependent on mid-grade and alloy grades of cobalt cathode and briquettes, with only one producer in North America, located in Canada. He also said the US was the world's largest consumer of cobalt metal, especially the alloy/aerospace grades.

The second trader gave a value indication for alloy grade cobalt of $20/lb, up from the March 25 assessment of $18-$18.50/lb.

"I think the frailty of the import supply chain into the US of cobalt, nickel and all the other base metals that come into Baltimore has just been laid bare for all to see," a cobalt consumer said. "This is not good, given the port is going to be shut for some time and we know just how tight cobalt inventories are."

A nickel producer said it was too early to tell how the nickel market would be affected by the Baltimore port disruption. He said his company had sufficient inventories in Baltimore for at least a month, and had "reassured customers" that it was "business as usual."

The source said it was possible that ships could be diverted to either Norfolk, Virginia, or New York, but containers would then have to be trucked to Baltimore, because both Baltimore and New York lacked dedicated metals warehousing facilities.

The producer source said container shipping lines were likely to declare force majeure and would not be responsible for trucking costs to get containers landed at an alternative port to Baltimore.

He also said that his warehousing company had said the port could be closed to navigation for up to two months.

A ferroalloys trader said his import shipments of high-carbon ferromanganese , medium-carbon ferromanganese and low-carbon ferrochrome from from India would be affected by the disruption in Baltimore.

"The problem is we don't know how long it's going to last and we don't know when our next ships are coming in, or where they're coming in to," the trader said. "If they go to Norfolk, we have to truck the containers to Baltimore, because we need a fully functioning warehouse, and there isn't one in Norfolk." This would add to costs and increase delays, he added.

A second ferroalloys trader said the next 48 hours "may give us more clarity over how long the disruption would last. "Baltimore is the most critical port for metals. ... This is a big deal in our world. Everyone is asking questions and we have few answers at the moment."

But another ferroalloys trader said the disruption to ferroalloys was not expected to be significant. "It's a hit for anyone using Baltimore," the trader said. "You have to divert to Norfolk or New York and truck it around. There may be some delays but I only see this as temporary."