Twin Ports shipping season ending with iron ore up, coal and grain down

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• Eight ships to lay up in the Twin Ports for the winter

A Canadian power company’s decision to go green resulted in lower waterborne cargo totals passing through the Twin Ports this season, even though iron ore and other cargoes were up.

The Poe Lock at Sault Ste. Marie, Mich., will close at midnight Wednesday, signifying the end of the Great Lakes shipping season. While the Duluth Seaway Port Authority doesn’t have final numbers for the 2011 shipping season yet, they have a pretty good idea how it will finish.

“We are going to be down about 6 to 7 percent from 2010 numbers,” said Adolph Ojard, Duluth Seaway Port Authority executive director. “The bright spot is iron ore, which is a huge economic driver for the region.”

But while taconite shipments were up this year, coal and grain shipments were down.

Coal is an important cargo in the Twin Ports.

Despite the regional connection of iron ore and the port, the tonnage of coal traveling through the port actually outpaced iron ore in seven of the last 10 shipping seasons, including a six-year run from 2005 through the 2010 season.

This shipping season, however, the tonnage of coal slipped around 20 percent. The reduction was due in large part to Ontario Power Generation’s decision to reduce its orders from 8 million tons to about 300,000 tons. The company is working to phase out the use of coal to produce electricity by the end of 2014, investing in electric and nuclear generation and testing the use of biomass fuels in plants that formerly were fueled with coal.

In response to Ontario Power’s decision and other changes in the North American market, Midwest Energy is working to enter new markets. It exported coal to Europe this year and signed a three-year deal to export close to 2 million tons a year to Rotterdam in the Netherlands beginning this year.

Midwest Energy President Fred L. Shusterich said the company is working to develop similar agreements, but so far nothing has come to fruition.

“We are working diligently on that,” he said. “Onward and upward is the way I look at it.”

Midwest Energy’s Superior terminal has an annual capacity of 25 million tons.

Grain shipments also declined this year — dropping by more than 40 percent from 2010.

“In 2010 we benefited from droughts in the Ukraine and floods in Australia,” Ojard said.

This season, by contrast, saw America’s wheat growers hindered by cold and wet weather. Further hurting America’s position in the global grain market was Russia’s decision to lift an export ban.

“Wheat prices in America were relatively high, so we weren’t as competitive,” Ojard said.

More than 16 million tons of iron ore passed through the Twin Ports this season. That is roughly 17 percent more than last year and nearly 100 percent more than the year before, when the recession saw Twin Ports’ iron ore shipments fall to 8.2 million tons from 18.4 million tons in 2008.

“In 2011, production in the iron mines was nearly 39 million tons — very near capacity,” said Craig Pagel, president of the Minnesota Iron Mining Association. “The projection for 2012 is that we will surpass that number. Not only will production be at all-time levels, there are also capital purchases being made to ensure the future of iron mining in Northeast Minnesota.”

The “other” cargoes category also increased this year. Ojard expects to see increases in some areas next season. During this season, for instance, the port received five shiploads of wind turbine components. The port already has commitments for nine shiploads during the next shipping season.

Considering the world economy, “we had a good year,” Ojard said. “Next year will be equally good.”

Tags: twin ports, iron range, lake superior, business, shipping, superior