The collapse of a key bridge in the United States, which serves as a major coal hub, is posing a significant threat to global energy supply chains. This disruption comes at a time when these supply chains have only recently started to recover from the slowdowns caused by the pandemic. The blockage at this crucial point in the coal transportation network could lead to extensive delays and challenges in meeting energy demands worldwide.
The collapse of a significant bridge in Baltimore on Tuesday is expected to result in the closure of the port’s coal exports for potentially up to six weeks. Ernie Thrasher, the CEO of Xcoal Energy & Resources LLC, revealed that the incident could obstruct the transportation of approximately 2.5 million tons of coal.
The US exported about 74 million tons of coal last year, with Baltimore the second-largest terminal for the commodity. Plugging up a major coal hub threatens to disrupt global energy supply chains that have finally begun to work out the kinks left over from pandemic slowdowns.
“Thrasher, speaking on behalf of Xcoal, a Pennsylvania-based coal trading firm with multiple suppliers, noted, “You’ll see some diversion to other ports but the other ports are pretty busy. There’s a limit on how much you can divert.”
According to Thrasher, CEO of Xcoal, the Baltimore port ships less than 2% of global seaborne coal, indicating minimal impact on global prices despite the bridge collapse. However, he noted that the coal exported from Baltimore, primarily India-bound thermal coal for electricity generation, would be affected by the disruption.
“It will cause some disruption or chaos from a supply-chain standpoint,” Thrasher said. “But the big question is the impact on India more than any global impact.”
India’s annual coal demand totals more than 1 billion tons and the nation imported roughly 238 million tons of the fuel in the most recent fiscal year, of which about 6% was shipped from the US. Baltimore accounted for around 12 million tons of the imports, according to a research note from analytics firm Energy Aspects.
