THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, August 18, 1994 TAG: 9408180519
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 79 lines
Stiff foreign competition and weak economies in export markets helped account for one of the worst months in recent years for the region's coal terminals.
Though July is typically a slow month, the port of Hampton Roads' three coal terminals loaded a combined 2.37 million tons last month, a record low for recent years.
For the first seven months of the year, coal loadings at the terminals in Norfolk and Newport News were down 15.4 percent to 24.1 million tons compared to the same period last year, and down 37.1 percent from the first seven months of 1991, which was the biggest recent year for coal loadings.
Despite the weakness, coal loadings may have hit bottom, and demand for coal may start perking up soon, exporters say.
``We do have better times ahead,'' said Wilson J. Browning Jr., president of W.J. Browning Co., a Norfolk coal forwarder and bulk vessel agency. ``It is darkest before the dawn.''
But what darkness it is.
At Norfolk Southern Corp.'s Lamberts Point terminal in Norfolk, July was the weakest month in many years, said Henry Watts, executive vice president for marketing. The terminal dumped 1.54 million tons of coal into the holds of waiting colliers.
So far this year, Lamberts Point's shipments have slumped 9.3 percent compared with last year.
At the two Newport News terminals, coal loadings fell off even more. At Pier IX Terminal Co., dumpings have dropped nearly 42 percent this year compared with last. Dominion Terminal Associates' coal loadings are down 18.5 percent.
The declines are being blamed on a glut of coal worldwide and the weak international economy, especially in Europe, the port's principal coal export market.
Renewed coal exports from South Africa and more competitive shipping rates and currency exchange rates in Australia took worldwide market share away from U.S. exporters, Watts said.
As a result, total U.S. coal exports, which were over 100 million tons in 1991 and 1992, slipped to 74 million tons in 1993.
But now the picture's beginning to change.
The global market, thanks to rebounding economies, has absorbed much of the glut in coal from new and less expensive producers, Watts said.
``We are seeing minor growth rates in our traditional markets like Europe, and we are seeing some huge growth in some emerging countries' markets,'' Browning said. ``Sooner or later this will require electrical power and steel.''
For both you need coal - steam coal to generate power and metallurgical coal to produce the coke necessary to smelt iron into steel.
That's translating into anticipated rebounds for the region's terminals. Lamberts Point will dump well over 2 million tons of coal in August, Watts said. ``We expect exports for the balance of the year will exceed the last five months of last year.''
Dominion Terminal, which dumped 691,455 tons of coal in July, will load about 1 million tons in August, 1.5 million in September and about 1 million a month till year's end, said President Charles E. Brinley.
And Pier IX, which did just 133,310 tons of coal in July, expects to load more than 300,000 tons in August, said President Charles M. Whitten. July ``may very well be the lowest point,'' he said. ``We see it picking up, probably from this point forward, probably for '95 and perhaps the rest of the decade before turning down again.'' ILLUSTRATION: Color Staff graphic
Coal Loadings in Hampton Roads, Jan.1 - Jan.31 each year 1989-1994
Source: Hampton Roads Maritime Association
For copy of graphic, please see microfilm.
KEYWORDS: COAL EXPORTS by CNB