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US East Coast coal terminals prepared for Hurricane Florence: sources

With Hurricane Florence’s landfall expected to take place in the Carolinas later this week, coal terminals along the US East Coast have prepared for Hurricane Florence, according to multiple sources Tuesday.

One coal export source said all the coal vessels at the terminals in the Hampton Roads region in Virginia were cleared out Monday, ahead of the mandatory stop issued by the Port of Virginia. He said workers at Norfolk-based Lamberts Point, the largest of the three terminals in Hampton Roads, were told to stay home as of 3 pm EDT Tuesday.

The port issued a hard stop for all terminal activities on Tuesday beginning at 11:59 pm EDT. All vessels are to depart Port of Virginia berths, according to a statement from the port.

Norfolk, Virginia, is the largest coal-exporting census district in the US.

The source said Hampton Roads has been backed up for quite some time as a result of the uptick in coal exports and rail issues, but this will worsen the backlog.

“Vessels in the queue had moved into the high teens earlier this year but they had booked it down to the low teens, but this will back them up again,” he said. “It’s going to back up an already backed-up system.”

“The best-case scenario is they will start loading vessels again Sunday, but the worst case would be some time next week,” he added.

Florence, a Category 4 hurricane, was located south of Bermuda Tuesday and is expected to make landfall Friday between South Carolina and North Carolina, according to the US National Hurricane Center.

On Tuesday, the US Coast Guard set the port conditions to X-Ray, which are “sustained gale force winds that are predicted to arrive at the Virginia Capes within 48 hours,” according to a statement. The USCG will then move the condition to Yankee, or gale force winds expected within 24 hours, at 11:59 pm EDT.

At 6 am EDT on Wednesday, the Coast Guard will close the main shipping channel, and port conditions will shift to Zulu, or gale force winds predicted within 12 hours, at noon EDT.

All coal vessels waiting for berths at Cape Charles anchorage were ordered to leave for sea Monday and all inbound vessels were barred from entry until the USCG allows them to return, according to a source with knowledge of port operations at Hampton Roads.

Roughly 18 vessels were ordered by the USCG to leave port. In addition, the US Navy has sent all of its vessels out to sea as well and all fighter jets were flying to inland bases Tuesday, said the source.

The source said that vessels will drift offshore until the port is reopened, and that the USCG has advised that the port shutdown could last seven to 10 days.

“There are limited assets as far as Virginia Pilots, docking pilots, and tug boats for vessels returning to port,” the source said. “The US Navy and container ships usually take precedence for re-entry to port [or] docking so tug boats and docking pilots will be limited for coal pier movements.”

An operations manager at Dominion Terminal Associates, based in Newport News, Virginia, also said that ships were cleared out Monday and the company had no plans to bring in any other ship before the storm.

“It usually takes about a week to recover, but whenever the captain opens the port, we will resume operation, unless we sustain damage, which I don’t expect to happen since it is south of us,” the operations manager said.

According to Dominion Terminal data, the last vessel was loaded at 5 am on Monday with 90,159 st on board. The next vessels are not scheduled to load until Friday, but 18 ships are expected to load 1.15 million st, or an average 64,077 st, in the next two weeks.

Last week, data from the Virginia Maritime Association showed that coal exports out of DTA were at a four-year high of 1.6 million st in August, up 24% month on month and 41% year on year.

Virginia Maritime Association Executive Vice President David White also said he does not think any more ships are expected to load before the storm.

Coal vessels waiting to load in Hampton Roads usually anchor around Cape Charles, but White said those vessels were also cleared out Monday.

“They don’t want a ship to start loading, and for whatever reason, a disruption happens and they’re stuck before the channels close,” White said. “That would be bad.”

White said it is generally safer for vessels to leave ahead of the storm and get to more favorable waters than be anchored and susceptible to the wind and sea conditions at a terminal. He added that there is no time table for vessels to return to port, but once conditions permit, the USCG will assess waterways and determine if navigating is safe.

Steve Doyle, president of BtuBaron, said in a social media post that Hurricane Florence is likely to disrupt exports from Norfolk and Newport News for a week or more.

Another source said the additional hurricanes — Isaac, Helene and Olivia — are really going to put a dent in the US coal supply for both metallurgical and thermal coal in the Atlantic. “Not so much in September,” he said, “but in October and especially November.”

The first source was not sure what to expect from the storm but said “we’re in sort of a wait-and-see holdout right now.”

He said he saw one model that predicted anywhere from 2 to 3 feet of rain.

“If we get all that rain, it’s going to be a disaster: with transportation, mining, everything, the whole supply chain. We’ve had more rain year to date than the yearly average, so it’s already wet around here,” he said. “The railroad mines that are in the river valleys — that are up against the mountains and the rivers — that water has nowhere to go except down to the river valley. That’s going to be a big mess that I don’t know what is going to happen.”

According to the Virginia Department of Emergency Management, the last major hurricane to hit Virginia was Hurricane Sandy in 2012.

As of 11 am EDT Tuesday morning, the USCG has not instructed any vessels to leave the Port of Baltimore, which remains at Whiskey, or gale force winds predicted within 72 hours.

CSX said it is monitoring the path of the hurricane and “has made extensive preparations for the potential impact of the storm.”

“The extent of the effect this system will have on CSX operations is not yet known; however, several regional operating departments are making tactical plan changes and curtailments to proactively minimize the impact to rail traffic,” said the railroad in a statement Tuesday.

Norfolk Southern did not respond to requests for comment.
Source: Platts

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