Via Mining.com,

As Hurricane Florence – a monster Category 2 storm – took aim at southeastern United States, one of the country’s most important coal export hubs halted operations last Thursday due to looming damage to ships and infrastructure, analysts at Wood Mackenzie.

The National Hurricane Centre said in an advisory note there was a danger of “life-threatening inundation, from rising water moving inland from the coastline”, particularly in North and South Carolina – south of Virginia’s three main coal export terminals at Hampton Roads.

While Hampton Roads may avoid a direct hit, there has already been an impact at the coal ports, the Scottish research and consultancy group said in a note.

While the actual impact and damage of Florence has yet to be fully understood, any significant delay to metallurgical coal exports will put upward pressure on prices in a market that is already supported with very high prices.

Most ships in port or queued awaiting loading have moved to deeper water. Loadings have stopped and may not resume for several days. The already high current vessel line-up, which is in the mid-teens, will likely increase by the time shipping resumes, the analysts expect.

The Hampton Roads region has a total capacity to ship 82 Mtpa via three major ports: Lamberts Point (40 Mtpa), Pier IX (22 Mtpa) and Dominion Terminal Associates (20 Mtpa). Lamberts Point is owned by the NS railway and has no ground storage area. Dominion Terminal Associates is owned jointly by Contura Energy (65 percent) and Arch Coal (35 percent). Pier IX is owned by Kinder Morgan.

According to WoodMac, any impact to Atlantic supply would be more significant for metallurgical coal than for thermal coal.

Metallurgical coal exports from April to June period from Hampton Roads averaged 2.9 Mt a month, so a week delay would mean 0.74 Mt of coal shipments stuck at port.

Thermal coal exports averaged 0.6 Mt per month for the same period, or 0.15 Mt per week. “With vessel queues averaging in the mid-teens recently and rail service struggling to keep up with deliveries, it is questionable that the ports would be able to quickly make up any loss,” the analysts said.

The projected inland track into the Southern Appalachians may also hit metallurgical coal production in Alabama.

They noted that the projected inland track into the Southern Appalachians could also interfere with metallurgical coal production in Alabama.

“Should the storm make landfall closer to the main ports, major delays in coal loadings would be expected due to power outages and regional flooding,” they warned.

Flooding could also affect regional power plants, as it happened in 2016, when Hurricane Matthew flooded cooling ponds at Duke Energy‘s Lee coal plant.

Another concern is the fate of unlined coal ash pits in the Carolinas and Virginia. Duke and Dominion Energy still have several unlined coal ash facilities along the coast and inland that leave communities vulnerable to potential flooding or leaks from the sites.



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