Steel Products Prices North America

Ice Conditions Finally Abate on Great Lakes

May 13, 2014

Shipping delays of iron ore on the Great Lakes are finally over. Ice coverage on the Great Lakes is down to 9.1 percent with the remaining ice concentrated in Lake Superior. According to satellite imagery, about 22 percent of Superior is still covered.

The US Coast Guard reports there are still small fields of ice in the Port of Thunder Bay, Eastern Lake Superior and outside of the Duluth/Superior. Two ice breakers are on standby in case high winds should push the ice into shipping lanes, however, commercial shipping is moving without need of escort.

Environment Canada reports the Great Lakes should be ice free by the end of the month.

Metals and mining analysts from Cowen & Company reported to their clients this morning, “Due to the heavy ice formations, Great Lakes iron ore shipments continued to trend below average in April. Iron ore shipments of 2.7MM mt were down 52% y/y and ~53% below the long-term average for the month. In the most recent AISI weekly reading, Great Lakes steel production is showing signs of a gradual recovery but remains ~6% below normalized levels.”

SMU spoke with one marine iron ore carrier who advised us that they had lost approximately 150 shipping days due to the weather (ice) issues on the Great Lakes and the Soo Locks. They are reporting business is back to “reasonably normal” but they are overbooked and “sufficiently challenged to get all of our float in for 2014.”

So, even though the ice situation is just about over the backlog of shipments will continue through the balance of the year.