Could Canal Drought Impact Salt Prices?
A cargo ship makes its way through the Panama Canal.
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Could Canal Drought Impact Salt Prices?

A historic Central American dry spell is causing less cargo to come through the Panama Canal. If it persists, could it impact salt supply?

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May 3, 2019

Our buddy Rob English, who provides us with regular detailed analysis on the state of the salt and deicing industry, sent this my way to share with all of you. At the very least, when it comes to rock salt availability and subsequent per-ton pricing for the commercial segment of the snow industry, this is news to keep tabs on.

Due to a sever dry season in Central America, the Panama Canal Authority has announced a fifth draft reduction for ocean vessels passing through the new locks, effective April 30. Apparently, the Pacific Ocean's El Nino phenomena has resulted in the driest period (December 2018 to March 2019) in the last 106 years, and meteorologists predict this condition may persist until June. Nearby Gatun Lake feeds the canal’s system of locks.

Rob hypothesizes this could impact vessel loads coming in from Chile, Peru and other areas that transit winter rock salt through the Panama Canal. “While its easy in the off-season to just up the schedule to increase any ‘shorted’ tons, this will have an impact on costs as less tons per sailing are aboard and additional vessel sailings are required to fill the shortfall. If this stays in for an extended period, it would likely then threaten in-season reload capability as smaller loads transit the canal.”

A few key strokes and a quick search lead me to the OceanAir website, a Boston-based international logistics management services and supply chain solutions provider, and an article on this very topic. CLICK HERE  to check it out for some more details.   

And CLICK HERE for Rob’s analysis on the state of the salt industry in the wake of Winter 2018-19.