Seaway Demand Plunged 35 Percent

Demand on the St. Lawrence Seaway-Great Lakes system fell off a whopping 35.3 percent to 19.3 million metric tons of cargo for the season to date through Sept. 30. And improvement, say operators, is not likely very soon.

"It’s pretty ugly," Mark Barker, president of Interlake Steamship Co., told the Journal of Commerce. His nine-vessel bulk commodity carrier headquartered in Richfield, Ohio, handles primarily coal, iron ore and some limestone.

"Iron ore and coal for the steel and power plants (along the Great Lakes Basin) are down for Interlake from about 89 percent capacity utilization late last year to about 38 percent now,” he said.

"The steel industry literally came to a screeching halt starting last fall," Barker said. "It’s slowly coming back, there’s some restarting of furnaces, but the steel companies are not going to bring capacity back until they see their back order books beginning to fill up and demand increasing. They’ve been slowly ramping up, but demand is still weak."

For the year through Sept. 30, iron ore shipments carried by the U.S.-flag fleet total only 14 million tons, down 61 percent from the period last year, the Cleveland-based Lake Carriers’ Association reported. The coal trade, for power plants along the Great Lakes Basin, is down 42.5 percent for the year thus far to 42.6 million tons. "Nobody expects to see a significant turnaround before this season ends, or soon next year," said Glen Nekvasil, LCA vice-president.

"This time last year we had recorded 22.3 million tons in vessel shipments and this year it is 19 million tons," said Fred Schusterich, president of Midwest Energy Resources Company, the largest coal terminal on the lakes. "That was almost entirely due to a Canadian utility company reeling under the effects of the recession and the very cool summer: it took almost half the coal it has taken before," he said.

"I don’t think the situation is going to reverse quickly," Schusterich said. "This is going to be a longer haul than most people would like."

"The key challenge is the iron ore trade for North American mills, down 54 percent from the same period last year," said Andrew Bogora, spokesman for Canada’s St. Lawrence Seaway Management Corp. "Associated with that, steel imports are down significantly."

Contact Courtney Tower at ctower@sympatico.ca.