The Baltimore Bridge Collapse – Trade Flow of Key Commodities May Hit

11 April 2024

The collapse of the Francis Scott Bridge in Baltimore, after being struck by a container ship early March 26, 2024 is likely to disrupt the flow of commodities in the key sectors, namely coal, auto, cobalt, and sugar through the Maryland port. This is a major hub for warehousing and transshipment of commodities on the US East Coast. How much US export coal to the world? How much import traffic of cobalt the US handled in 2023? Get answers to every trade-related question by analyzing US import-export trade data explained here. 

Bridge collapse blocks all vessel traffic to Port of Baltimore

According to a report, the Port of Baltimore handled a record volume of 1.1 million twenty-foot equivalent units of containers in 2023. The port is the largest in the United States of America of the specialized cargo, with Baltimore the top loading for US thermal coal exports in 2023.

U.S. coal exports on hold

According to a report, US coal shipments for departure are on hold as authorities have closed an area within 2,000 yards of the wreckage, blocking access to the Port of Baltimore. Remember the Port of Baltimore is the second-largest U.S. exporting hub behind Norfolk, Virginia. A significant disruption of the coal supply chain is anticipated if other ports can’t surge to provide an outlet for the coal that would have been exported through Baltimore.

In 2023, the United States of America exported coal worth USD 15,398 million due to the rising demand for US coal globally. The consumption of coal in India grew by 8% and China by 5% last year which forced the countries to import coal from the United States.

Other than India and China, the Netherlands, Japan, Brazil, Canada, Germany, South Korea, Poland, and Italy also import coal from the U.S. Here are the values of these countries which have been taken from the US export database.

The Port of Baltimore accounted for about 25% of the nation’s coal exports last year, as shipments surged from about 20 million short tons to 28 million tons, year over year amid growing demand for U.S. coal in Asia. More than 15 million tons of that was thermal coal, with most going to India, while about 8 million tons was met coal, with Japan and China being the biggest buyers.

Among U.S. coal miners who use the Port of Baltimore to export their commodity, it appears that energy companies are suffering the brunt of the impact, as vessels can’t get to its marine terminal.

Closure of the port is expected to impact US cobalt imports primarily

The closure of Baltimore Port has halted cobalt shipments, leading to tight inventories and a halt in spot cobalt offerings in the United States. In 2023, America imported cobalt worth USD 394 million. Norway was the largest import source, followed by Canada, Japan, the United Kingdom, Madagascar, Germany, France, Finland, Morocco, and China. See US import data of cobalt with stats of these countries in visualization.

The trade of sugar will be affected

The Port of Baltimore plays a significant role in the import and export of sugar. The refiners seem confident that the closure of the port will not immediately impact short-term operations. However, the timeline for the re-opening of the port is ambiguous, so the prognosis is likely to change over time. The effects may not be felt immediately, but down the road, the U.S. sugar market may experience shortages and increased prices as well. The chart given shows US trade data of sugar reported in 2023.

Delays of shipments for the auto industry are expected

The collapse of the Francis Scott Key Bridge has cast a shadow over Baltimore’s role as a key import hub for vehicles, primarily affecting auto markets. Asia-Pacific’s largest car exporters, including China and Japan are likely to bear the brunt of the incident, as Baltimore’s import activities play a crucial role in their supply chains. Understand the US auto industry better with data visualization.

Prices of major commodities are likely to go up in the international market

In the short run, there will likely be an increase in shipping costs for coal from West Virginia, Pennsylvania and Ohio as miners must shift their shipments from Baltimore to Norfolk. Prices of alloy-grade cobalt in the US climbed on March 26 on higher offer indications after the port of Baltimore was closed.

The bridge collapse was unlikely to have any direct impact on global scrap prices since US exporters still need to compete on price with EU exporters in the Turkish market. There could be a rise in crude oil due to increased bunker traffic because of the Baltimore port closure.

Market experts also suggest that while there may be short-term disruptions, the long-term impacts on the prices of coal and vehicles are likely to be minimized as global trade adjusts to new dynamics. Ultimately, most trade through Baltimore will find a new home port, minimizing price adjustments for coal and vehicles.

If you were to stand on the load platform at the massive sugar refinery along the Port of Baltimore, you would see the collapsed remnants of the Francis Scott Key bridge in the distance. The bridge was a vital piece of the city’s infrastructure and a notable part of its visual identity. Baltimore is the ninth busiest port in the U.S. in terms of dollar value and tonnage, so the effects of the Baltimore Bridge collapse will reverberate far and wide.