Some ships divert as LA-Long Beach container terminals still closed

Houston (Platts)--3Dec2012/615 pm EST/2315 GMT

Some bunker fuel demand has been diverted to other ports as numerous container ship terminals at the ports of Los Angeles and Long Beach in California remain closed due to a labor strike, market sources said Monday.

Several bunker market sources said the terminal closures are affecting demand from container ships at the ports. At least one ship owner said Monday that ships were diverted from Los Angeles to fuel elsewhere. Other sources say that non-container vessels, such as cruise ships and smaller ships are still able to refuel and demand is being met.

"There is a level of fear for the container ships looking to call LA, so we are still looking at that as a potential demand killer," said one bunker market source who does not deal with container ships.

Distillate traders in the US West Coast said exports were minimal for refined products in Los Angeles ports and those exports would be from refinery docks not affected by the strike. No imports were occurring, either.

"It doesn't affect us. There shouldn't be cargoes with these kind of inventories," one market source said. The only ripple effect could be from a reduction of diesel demand for trucks taking product off the dock, but he called that amount "a thimble in a swimming pool."

Three of the six container terminals at the Port of Long Beach remain closed, the same amount closed on Friday, according to the port's website.

Seven of the eight container terminals at the Port of Los Angeles remain closed, the same terminals affected Thursday and Friday, according to the port's website.

The Local 63 Office Clerical Unit of the International Longshore and Warehouse Union set up pickets at the ports, according to the union's website. The OCU's members have been working without a contract for 30 months while negotiations continued with carriers and terminal operators. Longshoremen with the ILWU have refused to cross the OCU picket line, further snarling port operations.

The National Retail Foundation Sunday asked President Barack Obama to engage in the contract negotiations, saying that a prolonged strike at the "nation's largest ports would have a devastating impact on the US economy."

--Lucretia Cardenas, lucretia_cardenas@platts.com

 --Matthew Kohlman, matthew_kohlman@platts.com 

--Edited by Katharine Fraser, katharine_fraser@platts.com

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