Hamp­ton Roads saw ‘grav­ity-de­fy­ing’ hike last year, but an­a­lysts are cau­tious about the slow­ing econ­omy

Daily Press - - Front Page - By Gor­don Rago Staff writer

All three coal ter­mi­nals in Hamp­ton Roads saw dou­ble-digit in­creases in ex­ports last year when com­pared to 2017, and the port ex­ported nearly twice as many tons as two years ago.

But an end-of-the-year slow­down, cou­pled with wor­ries over the global econ­omy, has some an­a­lysts cau­tious head­ing into the new year.

Hamp­ton Roads — the big­gest coal-ex­port­ing port in North Amer­ica — fin­ished 2018 at nearly 43 mil­lion tons, what some an­a­lysts de­scribed as a “grav­ity-de­fy­ing” 91.1per­cent hike from the 22.28 tons ex­ported two years ago. When com­pared to 2017, last year’s fig­ures are a roughly 22-per­cent in­crease.

“There weren’t any sus­tained pe-

ri­ods of weak­ness,” Jim Thomp­son, a Knoxville, Tenn.-based se­nior direc­tor of U.S. coal for IHS Markit, a global re­search firm, wrote in a re­port last week. “In fact, con­sis­tency was a hall­mark, which points to the ef­fec­tive­ness of the sup­ply chain.”

The news wasn’t all good, though.

Ex­ports did not surge in last year’s fourth quar­ter as they did the pre­vi­ous two years. They in­stead dropped from 10.81 mil­lion tons in the third quar­ter to 9.94, mak­ing for what Thomp­son called an “an­ti­cli­mac­tic” end to the year.

And while it’s early to pre­dict 2019, ex­ports could fall fur­ther in a global econ­omy show­ing signs of slow­ing, the re­port said.

A re­ces­sion would have “sig­nif­i­cant im­pact” on met­al­lur­gi­cal coal, which is used in mak­ing steel, and ac­counts for a big chunk of ex­ports head­ing out of Hamp­ton Roads, Thomp­son said. If de­mand for steel goes down in the fu­ture, met­al­lur­gi­cal coal could fall.

An eco­nomic down­turn would also cre­ate ob­sta­cles for ex­ports of ther­mal coal — the type used in elec­tri­cal power plants. Ther­mal coal de­mand can also be im­pacted by some­thing like a change in the weather. A milder win­ter, for ex­am­ple, could lower coal prices.

Hamp­ton Roads is home to three coal-ex­port­ing fa­cil­i­ties.

In 2018, Nor­folk South­ern Corp.’s Pier 6 at Lam­berts Point led the way in coal vol­umes, ex­port­ing 17.16 mil­lion tons, up by about 16 per­cent from the year be­fore.

Do­min­ion Ter­mi­nal As­so­ciates in New­port News pro­cessed nearly 15.8 mil­lion tons in the same pe­riod, a 23-per­cent spike com­pared to 2017.

Kinder Mor­gan’s Pier IX, also in New­port News, han­dled 9.62 mil­lion, a 31-per­cent jump over the year be­fore.

Thomp­son made sure not to char­ac­ter­ize 2018’s fourthquar­ter slow­down as a weak quar­ter. It’s all rel­a­tive, he said, be­cause you have to look at how strong the year was when com­pared to the last sev­eral.

He did won­der if ex­ports in the new year will trend slightly down due to reach­ing a plateau in Hamp­ton Roads.

“Some would ar­gue the data es­tab­lishes an ex­port ceil­ing,” he wrote in his re­port. This past year, he said, yielded a “re­mark­able per­for­mance.”

The ques­tion is whether it can be du­pli­cated in 2019.


Hamp­ton Roads, the big­gest coal-ex­port­ing port in North Amer­ica, ended 2018 at nearly 43 mil­lion tons, 22-per­cent higher than 2017.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.