Despite flat steel and coal prices, the Port of Mobile continues to invest in infrastructure that will strengthen its capacity to handle more exports of those commodities.
“We’re continuing to build and grow for the future, so when the economy picks up our business is poised to really jump out there, “said Jimmy Lyons, executive director of the Alabama State Port Authority.
Mobile’s steel volumes continue to grow even as a nearby stainless steel plant is transferred to Finnish company Outokumpu as part of the sale of all ThyssenKrupp’s global stainless steel facilities for approximately $3.5 billion, thus creating the world’s largest stainless steel manufacturer. “It will be ramping up during the year,” Lyons aid. “Under this new group I think it will be even more successful than it would have been had it stayed as a division of ThyssenKrupp.”
The port authority built a new steel terminal at Pinto Island three years ago to handle shipments for the $4.2 billion twin steel mills that ThyssenKrupp built at Calvert, 40 miles north of the port. ThyssenKrupp still owns the carbon steel plant at Calvert, but it too be may be sold soon to one of six potential buyers. Lyons said the carbon steel plant has pushed back its production goals until global demand recovers. The plant is focused on producing value-added steel for the growing number of automotive plants in states around Mobile and for plants in Mexico and Canada.
The mills in Mobile’s immediate hinterland, including the two ThyssenKrupp plants, Nucor’s three Nucor Alabama mills and its Mississippi mill, and SSAB are using the semi-liner services operated by Clipper Projects of Denmark from Europe to the Gulf and on to Mexico. “Now we are picking up all the export business from these mills and we are becoming one of their bigger ports.” Lyons said. “Some of this is driven by the ThyssenKrupp volumes, but we’ve got coils we can throw on those ships for Mexico.”
Clipper transports steel beams, sheet pile, coils and plate from Europe for the U.S. construction market. “Nucor is finding it can become a collection point from its half dozen different mills and put them on a ship bound for the Caribbean, which is our market,” Lyons said.
The port’s total import and export steel volumes increased by 30 to 40 percent in fiscal 2012 to 4.6 million tons and are expected to increase by that amount again in fiscal 2013. The port authority is preparing for increased steel volumes by repaving its Pier North C steel terminal, upgrading the pier and building a warehouse for steel coil in 2013. Lyons said Mobile will become a regular liner stop for breakbulk services, so it can become a focal point for steel products. “That’s where a lot of our investments in steel are starting to pay off,” he said. “It’s increasing our market share.”
Mobile’s imported coal volumes are falling off as U.S. electric power utilities cut back on coal purchases. “Utility coal imports are dead-on flat and could go away completely by 2015, because of regulation and natural gas,” Lyons said. But the port’s utility coal exports are growing because of demand by European power companies. “They need the cheap energy, and our coal is a competitively priced source of energy.” As a result the port will commission a new ship-loader for coal in December, which will give it another 5 to 6 million tons of export capacity. The port authority is also considering investing another $70 million to retrofit its import coal terminals for the export trade. “We could well go to three export berths from the two we’ll have in operation by the middle of next year.”