The port has the capacity to ship about 9 percent of global metallurgical coal export volumes and was on target to move about 20 million metric tons of the steelmaking component this year, Barclays Plc (BARC) said in a research note today.
A ship crashed into a trestle leading to one of the berths at the port on Dec. 7, Nick Desmarais, a spokesman for Westshore, said today in a telephone interview.
Prior to the incident metallurgical coal was starting to show signs of a rebound as global steel production increased and as companies from Appalachia to Australia cut output to stem declines, David Gagliano, an analyst at Barclays in New York, said in the note.
“Obviously accidents are never a positive for those directly involved,” Gagliano said. “However, strictly from a supply/demand and pricing perspective, issues that constrain supplies have the potential to have a positive impact on underlying prices.”
Westshore is assessing the damage this week and plans to have a restart target sometime next week, Desmarais said.
BHP Billiton Ltd. (BHP), the world’s biggest coking coal exporter, last week settled the first-quarter benchmark contract for the fuel at $165 a metric ton, the lowest since pacts shifted to quarterly settlements from annual agreements in the first quarter of 2010, Doyle Trading Consultants LLC, a New York-based energy research firm that specializes in coal, said Dec. 6.
With one of the berths down, Westshore’s export capacity will be reduced by about 830,000 metric tons a month, assuming it was on target to ship 20 million metric tons, which “we believe would prove to be a meaningful enough hit to global supplies, given the timing and current prices” Gagliano said.
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