The Baltimore bridge disaster has opened a brief opportunity for Australian coal exporters to fill a big gap in Indian coal imports -- especially coal needed by brick makers in the world's most populous nation.
The US Energy Information Administration (EIA) says around 14 million tonnes of thermal coal was sent to Indian buyers in 2023 from Baltimore and the disappearance of that tonnage will have an impact on the supply-demand balance in Asia and the Indian Ocean markets, and on prices if it persists.
Seven million tonnes of steelmaking met coal was sold into the Japanese and other Asian markets, such as South Korea, and Australian exporters should be able to pick up those shortfalls very easily, if only for a month or three.
Companies like Glencore, BHP, Stanmore, Whitehaven and Yancoal could be possible suppliers.
Thermal coal futures prices in Newcastle (the major pricing point for high-quality steaming coal) saw prices rise a solid $US6 a tonne last week to around $US132 to $US134 a tonne with the 5% plus gain -- all coming after the container ship ran down the bridge in Baltimore Harbour.
The EIA said in a note on Thursday that "Baltimore is responsible for an outsize share of coal shipments to the rest of the world, with India an especially large destination. An extended disruption to the port could mean a supply shock that extends to Asia and potentially reverberates back into global supply chains."
There was talk over the Easter break of Indian traders looking for emergency tonnes from Indonesia and Australia.
A handful of Australian companies produce the high-grade thermal coal Indian brick-makers and some other consumers buy from the US. Indonesia could supply, but its coal is heavily sold to China and mostly of poorer quality (and lower price) than the US coal.
The Indian buyers would be buying from nearby Indonesia if it were a question of price, but the more expensive US (and Australian) thermal coals are higher quality and less polluting.
Baltimore is home to two coal export terminals, one owned by railroad giant CSX and the other by miner Consol Energy subsidiary Consolidated Coal.
The two terminals are on the inside of the port and the collapsed bridge -- thanks to the 90,000-plus tonne container ship, Dali, ramming a support pier -- are unable to service markets.
That will remain the case until the port re-opens. In the meantime, coal can be diverted to nearby Hampton Roads/Norfolk, but that will take time and add costs and will depend on port capacity.
Baltimore is the second-largest exporting hub for coal in the United States, accounting for 28% of total coal exports in 2023 and second only to Norfolk, Virginia, also known as Hampton Roads.
After shipping around 20 million tonnes a year up to 2022, exports from Baltimore surged to 28 million tonnes last year, "mainly because of growing demand for US coal in Asia," according to the EIA.
A total of 19 million tonnes of thermal coal was exports through Baltimore, with 14 million tonnes of that heading to India and the remainder to Europe and smaller markets. The remainder is coking coal for the steel industry -- mostly in Asia, led by Japan, and then Europe.