Baltimore Bridge Collapse Sparks Frenzy In Dry Bulk Market

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  • The collapse of a bridge near the Port of Baltimore has disrupted shipping demand, affecting cargo movement to and from the port.
  • Importers of US cargo are seeking alternative destinations, while exporters are facing delays.
  • This situation has particularly impacted dry bulk cargoes, with coal exports to Asia being significantly affected.
  • The closure of the port access has prompted Asian countries to source coal from the spot market, leading to a shift in trade patterns and a potential reduction in shipping demand.

The collapse of a bridge near the Port of Baltimore has disrupted shipping demand, causing significant delays and logistical challenges for cargo movement. Importers of US cargo are actively seeking alternative destinations, while exporters are experiencing disruptions in their supply chains. This situation has particularly impacted dry bulk cargoes, which are a crucial part of the port’s operations.

Key Commodities Affected

The Port of Baltimore handles various dry bulk commodities, including coal, sugar, gypsum, and fertilisers. Coal exports, in particular, account for a significant portion of the port’s trade volume, with around 25 million tonnes exported annually. The closure of the port access has disrupted the handling of these commodities, leading to concerns about supply chain stability and shipping demand.

Impact on Coal Exports

Coal exports from the Port of Baltimore to Asian countries such as India, China, and Japan have been severely affected by the bridge collapse. Approximately 1.5 million tonnes of coal are exported to Asia every month, contributing significantly to dry bulk shipping demand. The disruption in coal exports has prompted Asian countries to source coal from the spot market, leading to changes in trade patterns and shipping routes.

Shift in Trade Patterns

Asian countries are turning to the spot market to meet their coal demand, sourcing thermal coal from Indonesia, Australia, and South Africa, and coking coal from Australia. This shift in trade patterns has shortened sea distances and impacted global shipping demand. Vessels heading to Asia from the US are now transiting through longer routes, further complicating the shipping dynamics.

Anticipated Recovery and Government Intervention

While the bridge collapse has caused significant disruptions, it is anticipated that the US government will take prompt action to clear the shipping route and minimize economic impacts. Once access to the port is restored, trade patterns are expected to normalize, and shipping demand will recover. However, in the short term, freight rates may remain dampened due to the ongoing logistical challenges and changes in shipping routes.

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Source: Drewry