Hurricane Florence is projected to make landfall as a Category 4 Hurricane on the east coast of the U.S. on Saturday 15 September. Category 4 hurricanes have sustained winds of 130 to 156 mph (209 to 251km/h).The current, projected track of the hurricane puts landfall near Wilmington North Carolina – roughly 200 air miles – south of the major coal exporting port of Hampton Roads, Virginia. The storm is then expected to stall along the coast before moving inland toward Atlanta, Georgia. While the impact will be devastating in the Carolinas and the southern Appalachian mountains the hurricane will likely miss Hampton Roads and coal-mine-rich Central Appalachia except for western Virginia. Norfolk is still officially under a Tropical Storm Watch.
Although Hampton Roads will now likely avoid a direct hit, there has still been an impact at the coal ports. Most ships in port or queued awaiting loading have moved to deeper water. Loadings have stopped and may not resume for several days. The already high current vessel queue, which is in the mid-teens, will likely increase by the time shipping resumes.
The Hampton Roads region has a total capacity to ship 82 Mtpa and is made up of three major ports, Lamberts Point (40 Mtpa), Pier IX (22 Mtpa) and Dominion Terminal Associates (20 Mtpa). Lamberts Point is owned by the NS railway and has no ground storage area. Dominion Terminal Associates is owned jointly by Contura Energy (65%) and Arch Coal (35%). Pier IX is owned by Kinder Morgan.
For the April through June period, monthly metallurgical coal exports from Hampton Roads have averaged 2.9 Mt. This means each delay of a week would mean 0.74 Mt. Thermal coal shipments averaged 0.6 Mt per month for the same period, or 0.15 Mt per week. With vessel queues averaging in the mid-teens recently and rail service struggling to keep up with deliveries, it is questionable that the ports would be able to quickly make up any loss.
The projected inland track into the Southern Appalachians could potentially interfere with metallurgical coal production in Alabama.
The Hampton Roads region is still expected to face some storm surge and unusually high tides as well as associated heavy rains. These factors have some potential to interfere with normal business.
Actual impacts on US coal exports will depend on the exact location of landfall and subsequent storm track. While the weather models are consistently showing a track that takes the storm south of Hampton Roads with a southerly inland track, there is always some uncertainty. Should the storm make landfall closer to the main ports, major delays in coal loadings would be expected due to power outages and regional flooding.
The port of Galveston was closed for about 7 days in 2017 after Hurricane Harvey despite not receiving any major damage. Sources involved with coal trade expect the ports in Hampton Roads to be closed for a similar amount of time if Florence makes landfall further north. If the inland track pushes the storm into Central Appalachia, mining and rail transportation could be interrupted for weeks.
At this point, the amount of damage and duration of delays can only be speculated. But, any significant delay to metallurgical coal exports will put upward pressure on price in a market that is already supported with very high prices.