Force Majeure was declared late Wednesday at Virginia's Dominion Terminal Associates as dangerous wind and blizzard conditions continued to wreak havoc on US coal exports and could raise global metallurgical coal prices.
The Newport News, Virginia-based terminal, one of three ports in the Hampton Roads region, handles metallurgical coal shipments off the US East Coast from Contura Energy and Arch Coal and other companies. The company said in a letter to customers the extreme weather in the region would "prevent the dumping of coal from railcars and the loading of vessels at average rates."
"DTA will make commercially reasonable efforts to resume the dumping of railcars and the loading of vessels at a normal average rate as soon as possible," the terminal said.
"Vessels are not able to depart the pier - even if we load the vessel, they are not allowed to depart the pier," Carl Blum, a shift supervisor at DTA, said.
The US Coast Guard will "make the final decision" on reopening the port, Blum added.
Exports from DTA, Lamberts Point and Pier IX, the three terminals comprising Hampton Roads that ship out of the port of Norfolk, totaled 32.45 million mt in the year through November, up 65% from the same 11-month period the prior year, according to data from the Virginia Maritime Association.
At the DTA terminal, exports through November totaled 11.4 million mt, up 66.7% from a year-ago.
Total coal exports from the port of Norfolk totaled 21.9 million mt through October, according to US Census Bureau data. Met coal comprised roughly 85% of the total volume with Brazil, India, and the Ukraine receiving the highest quantities, according to the Census data.
In Asia, met coal buyers said there might be some trickledown effect on met coal prices in the region. Platts Premium Low Vol FOB Australia was assessed at $262.25/mt Thursday, up 22% from December 1.
European steelmakers have been active in the spot market in December and it is uncertain whether the latest situation in DTA would have any impact on immediate spot demand.
Several Asian sources said that while this is likely to affect European buyers the most -- with some impact on Indian or Northeast Asian mills who buy US coals -- this may cause Europeans to start buying already limited Australian supply.
European sources expected the disruptions to affect met coal markets more than the thermal coal market in Europe.
"We've been sourcing a lot of US coal recently, but it sounds like it is a short term disruption," a Northwest Europe-based utility-trader said. "It seems the majority of coal coming from those terminals is met coal, so we wouldn't expect a significant impact on the thermal market unless the FM goes on for a long while," the source added.
