US exporters of post-use low-density polyethylene (LDPE) film bales were processing the effects of a bridge collapse at Baltimore, Maryland, on March 26, said Chemweek.
A container ship struck the Francis Scott Key Bridge, causing the structure to collapse and shutting down the fifth-busiest container ship port on the US East Coast.
“Anyone with cargo on that ship is liable for damage,” said one exporter, adding that the insurance departments of commodity brokerages were scrambling to understand the impact of the collision.
Another exporter said the indeterminate closure of the port would impact its post-use LDPE bale shipments out of Baltimore. Although the volumes exported from Baltimore represent only a small portion of total US scrap plastic ethylene derivative exports, according to US International Trade Commission (ITC) data, a third exporter said the port closure could add delays to the next closest ports, such as New York and Norfolk, Virginia.
In all of 2023, Baltimore saw only 1,125 metric tons of scrap plastic exports, or less than 1% of the total 153,575 metric tons exported by the US. Three East Coast ports — New York and Norfolk, as well as Savannah, Georgia — handled more than half of the total 2023 export volumes.
For one shipper, New York is the best alternative while the port is closed, and a second said Norfolk is smaller but less complicated to navigate than Philadelphia. Regardless of the alternative port chosen, the sources agreed that the extra logistical steps to get to a more distant port could increase overall costs, including trucking and demurrage.
And although shipping on a cost, insurance and freight basis covers damages arising from such an incident, the first exporter said some shippers opt not to pay extra for the insurance coverage. In such cases, the incident could cause lasting and catastrophic financial damage, the source said.
Platts, part of S&P Global Commodity Insights, last assessed post-use A-grade LDPE film bales at 16 cents per pound (lb) FOB Chicago on March 25. Sources said before the collision that exporters’ bids were firming slightly on the week — last heard at 17 cents per lb FAS Chicago. Although cargoes for export tend to be priced higher than domestic bids to account for transportation costs ex-warehouse to port, domestic buying ideas do not have much room to go lower before sellers prioritize volumes for export, said a broker.
In virgin resin, only 1,236 metric tons of polypropylene, PE and polyvinyl chloride left from Baltimore in 2023, out of the 12.3 million metric tons of total US outflows, according to ITC data.
We remind, the US Department of Energy (DOE) has selected ExxonMobil’s Baytown, Texas, olefins plant carbon reduction project to receive up to USD331.9 million in funding under the USD6-billion Industrial Demonstrations Program (IDP). The announcement comes one month after a report in the Houston Chronicle that ExxonMobil might have to cancel the project if proposed federal tax incentives for the production of clean hydrogen exclude the use of carbon capture and sequestration (CCS).
mrchub.com