Thomson Reuters






By Rod Nickel


WINNIPEG, Manitoba, April 30 (Reuters) - The biggest ice
cover on the Great Lakes in decades is backing up shipments of
everything from Canadian grain to U.S. iron and steel in one of
North America's most important economic regions.


The frigid winter and cool spring have hurt companies like
Cliffs Natural Resources Inc and United States Steel
Corp, and also hampered efforts to clear an unprecedented
buildup of grain and oilseeds in Western Canada.


The Great Lakes region accounts for nearly one third of
combined Canadian and U.S. output, jobs and exports, according
to a report by Bank of Montreal on April 25.


Pittsburgh-based US Steel expects reduced second-quarter
income from operations due to limited production and slower
shipments of raw materials and finished goods, said Chief
Executive Mario Longhi on a conference call on Wednesday about
first quarter results.


"Ice conditions in the Great Lakes, and particularly Lake
Superior, are the worst we have seen in over 30 years," Longhi
said.


Vessels traveling across Lake Superior require an escort by
ice-cutting equipment, limiting the number of ships and
extending travel times, he said.


Cliffs Natural Resources, based in Cleveland, Ohio, said
that the Great Lakes experienced more than 70 days of -30
degrees F (-34.4 Celsius) temperatures during the winter, making
it hard for Cliffs to ship iron ore pellets to North American
steel makers. Some steel makers have had to reduce or idle
production, Cliffs Chief Executive Gary Halverson said on
Friday.


The late ice cover compounds a backlog of Western Canadian
grain, which piled up due to the frigid winter and record
harvest overwhelming Canadian National Railway Co and
Canadian Pacific Railway Ltd, which move crops to port.


At Port of Thunder Bay, Ontario, 20 vessels are waiting to
load grain, with about two-thirds of Lake Superior covered in
ice, said the port authority's chief executive Tim Heney.


Heney expects a surge of activity for the next three weeks
to clear terminals that are nearly full of grain after the port
opened to navigation on its latest date on record. By then, the
remaining shipping restrictions on Lake Superior should be
lifted, Heney said.


Grain handlers including Cargill Ltd, Richardson
International Ltd, Viterra and Parrish & Heimbecker own
storage terminals at the port. Some coal shipments are also
delayed, Heney said.


Vessels using the St. Lawrence Seaway, which connects the
Great Lakes with the Atlantic Ocean, restricted vessels in early
April to one-way traffic in certain areas and navigation during
daylight only, said Andrew Bogora, spokesman for the St.
Lawrence Seaway Management Corp.


The Seaway is now free of ice, but shipping volumes in April
are likely to be light, he said.