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Nov.30, 2015

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20 THE JOURNAL OF COMMERCE www.joc.com NOVEMBER 30.2015 U.S. GULF REPORT SPECIAL REPORT That investment is going into devel- opment and construction of plants producing polyethylene and polypro- pylene. "We're going to see huge growth in the next year or two in project cargo imports." The boom may start to wane after 2018 when many of the plants under construction near completion. But the new plant, in turn, will fuel a growing volume of containerized resin and plas- tic exports through the port as the dollar weakens. Up until this year, when oil prices tum- bled, breakbulk steel imports at Houston and New Orleans were at record or near- record levels. "It's been a bonanza," said Gary LaGrange, president and CEO of the Port of New Orleans, which has six break- bulk and project cargo terminals with a combined berth length of 13,500 feet. "Last year was our best year in 14 years, with steel and iron ore imports up over 101 percent over the previous year." He attributed the boom to the fact that economic confidence has returned and to the drop in inventories of the manufacturers of various steel products. Although steel imports are still strong at Houston and New Orleans this year, they've started to level off. "We've been up in steel imports for most of the year, as kind of a lagging activity in drilling for most of the shale play, but it's fallen off in recent months because they are very dependent on oil prices," Guenther said. The decline comes on the heels of two near-record years of steel impor ts in 2013 a nd 2014 and the first eight months of this year. "Although this year is not as strong as last year, it's still an uptick," LaGrange said. "Steel imports through New Orleans were up 19 percent, nonferrous metals up 36 percent and forest products up 4 per- cent in short tons through May. "I think there's going to be a small dip in breakbulk this coming year, but it's not going to be so substantial that it's going to put us back where we were in 2007, 2008, 2010." The story is slightly different in the eastern Gulf, where project cargo plays less of a role in the general cargo trades. "Steel cargoes are doing very well in the Port of Mobile, where we're operating at about the 5 million-ton-a-year level, which puts us in a sweet spot behind Houston," said Jimmy Lyons, direc - tor and CEO of the Alabama State Port Authority. "We'll do a little bit better than 5 million tons this year." The port, he said, would be exporting more break- bulk cargo if the dollar wasn't so strong. Unlike Houston or New Orleans, Mobile's steel volumes are almost equally divided between imports of steel slabs for the two former ThyssenKrupp mills at Calvert, 40 miles from the port, and exports of carbon and stainless steel coils produced by the plants, which were acquired last year by ArcelorMittal and Nippon Steel and Sumitomo Metal. "We have a good balance of busi- ness," Lyons said. "Both of those plants are exporting, mostly to Mexico through Mobile." The plants' steel exports are carried to Mexico on a regular breakbulk service operated by Clipper Elite and on the Central Gulf Railway's twice-a-week rail-ferry service, which is owned by International Shipholding. The port opened a $$36 million steel terminal this year to handle the steel coils produced by the mills. The new terminal provides 178,200 square feet of covered bay area equipped with three 50-ton-capacity overhead bridge cranes. The terminal has a new warehouse management system that enables the operators to keep track of where the coils are and finding the proper coil "without having to dig a lot," Lyons said. Forest product volumes are holding up well, he said. Mobile handles imports of wood pulp from Brazil and exports of fluff pulp for Europe and Asia. It's also "WE'RE GOING TO SEE HUGE GROWTH IN THE NEXT YEAR OR TWO IN PROJECT CARGO IMPORTS."

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