by hausen » July 12, 2012, 6:27 pm
Similar information has been floating around the last week or two, although Sturgeon Bay has usually been the rumored destination, not Superior.
This of course would be great news for boatwatchers. It's definitely a plausible development, as there is a big change in the iron ore trade on the horizon. Starting in mid-late 2013 Essar Minnesota will be producing 4 million tons of taconite pellets per year and sending it from an as yet unnamed western Lake Superior port to Essar Algoma at the Canadian Soo. Additionally Essar MN seems to be planning to increase production capacity to 7 million tons of pellets annually in the near future.
I'm sure some of this new trade will mean a major reduction in Cleveland Cliffs' current shipments from Tilden Mine via Marquette to the Canadian Soo, but despite that we might still see an overall increase in tonnage carried on the lakes. There are two main reasons that could possibly be the case:
First, as evidenced by all the pellets going down the lakes for overseas transshipment at Quebec City, Cliffs is well-versed in selling pellets on the open global market and may be able to shuffle things around so that the Marquette pellets currently going to Algoma find a new destination without a drop in production. Secondly, it appears that Cliffs operations in the UP currently send a considerable amount of taconite by rail to Essar Algoma, something like 1 or 2 million tons per year. If most of Essar Algoma's pellet intake switches from Cliffs Upper Peninsula operations over to the new Essar Minnesota plant, it seems unlikely that much if any of that trade would be sent via rail. Ships are more efficient at moving cargo than trains, and this difference would be proportionally larger over the longer haul from western Lake Superior to the Soo vs. Marquette to the Soo.
So it seems like there's a good chance that there will be a substantial increase in iron ore haulage on the lakes starting and 2013 and hitting full swing in 2014. Perhaps Interlake has its sights set on getting some or all of this business and the Sherwin is part of those plans. Or perhaps Interlake thinks that even if they're not directly involved in the change in ore haulage, they can use their efficient, re-engined fleet (including the Sherwin?) to aggressively pursue other customers that another company might have lost as a consequence of going after the Essar tonnage. And whether Interlake or the Sherwin is involved at all it will hopefully mean more Lakers out sailing and not sitting at the wall.
Similar information has been floating around the last week or two, although Sturgeon Bay has usually been the rumored destination, not Superior.
This of course would be great news for boatwatchers. It's definitely a plausible development, as there is a big change in the iron ore trade on the horizon. Starting in mid-late 2013 Essar Minnesota will be producing 4 million tons of taconite pellets per year and sending it from an as yet unnamed western Lake Superior port to Essar Algoma at the Canadian Soo. Additionally Essar MN seems to be planning to increase production capacity to 7 million tons of pellets annually in the near future.
I'm sure some of this new trade will mean a major reduction in Cleveland Cliffs' current shipments from Tilden Mine via Marquette to the Canadian Soo, but despite that we might still see an overall increase in tonnage carried on the lakes. There are two main reasons that could possibly be the case:
First, as evidenced by all the pellets going down the lakes for overseas transshipment at Quebec City, Cliffs is well-versed in selling pellets on the open global market and may be able to shuffle things around so that the Marquette pellets currently going to Algoma find a new destination without a drop in production. Secondly, it appears that Cliffs operations in the UP currently send a considerable amount of taconite by rail to Essar Algoma, something like 1 or 2 million tons per year. If most of Essar Algoma's pellet intake switches from Cliffs Upper Peninsula operations over to the new Essar Minnesota plant, it seems unlikely that much if any of that trade would be sent via rail. Ships are more efficient at moving cargo than trains, and this difference would be proportionally larger over the longer haul from western Lake Superior to the Soo vs. Marquette to the Soo.
So it seems like there's a good chance that there will be a substantial increase in iron ore haulage on the lakes starting and 2013 and hitting full swing in 2014. Perhaps Interlake has its sights set on getting some or all of this business and the Sherwin is part of those plans. Or perhaps Interlake thinks that even if they're not directly involved in the change in ore haulage, they can use their efficient, re-engined fleet (including the Sherwin?) to aggressively pursue other customers that another company might have lost as a consequence of going after the Essar tonnage. And whether Interlake or the Sherwin is involved at all it will hopefully mean more Lakers out sailing and not sitting at the wall.