Panamax coal freight rates on established routes from South Africa’s Richards Bay and Indonesia to India ended the week sharply higher Friday as grain cargoes in the US Gulf continued to absorb tonnage, even as Capesize freight rates began to lose steam.
Panamax freight rates on the Richards Bay to India route have largely remained in the range of $17-20/mt, depending on the port location, shipment quantity and bargaining power of the charterer, sources said.
For a Panamax sailing from Richards Bay to India’s east coast in October, charterers are asking for about $17.20/mt while vessel owners are asking for about $19.50/mt, an India-based shipbroker said.
Several sources said that vessel owners today are asking for a premium for India-bound vessels, as they prefer to ballast to the US Gulf for grain cargoes.
“Vessel owners are asking for higher numbers, but I haven’t seen any fixtures at those numbers,” a Singapore-based coal trader said.
He said he is holding back on shipping coal as freight rates continue to rise.
“The biggest trade lane for Panamaxes is still ‘Intra-Asian’ which is predominantly Australia-Asia and Indonesia-Asia, but we have seen a steady increase in Americas-Asia which includes Brazil/Colombia/US,” Arctic Securities analyst Erik Nikolai Stavseth said in his daily report on Friday.
At least three Panamax vessels carrying coal between the east coast of Australia and the east coast of India were reportedly fixed this week in the range of $21.75-23/mt.
“A busy week in the Atlantic saw rates climb, driven by demand for grain loaders from the US Gulf. Front haul levels are very firm and trans-Atlantic trade has also improved,” broker Braemar Seascope said in its weekly note on Thursday.
Platts assessed the daily Panamax freight rates from South Africa’s Richards Bay to India’s west coast at $18.70/mt and to the east coast at $19.30/mt, both up 20 cents on-day and up $1.30/mt on-week.
Platts also assessed the daily Panamax freight rates from South Kalimantan to India’s west coast at $13.80/mt and to the east coast at $12.40/mt, both up 20 cents on-day and up $1.10 and 90 cents, respectively, week-on-week.
Panamax voyage charter rates cost an average of $15,000-16,000/day in the Pacific basin currently, but vessel owners are asking a premium of nearly $1,000-2,000/day to go to India, a Singapore-based shipbroker said.
For Panamax vessels plying the East Kalimantan to India east coast route, freight rates are in the high $12/mt levels, and about $13-14/mt for those sailing to the west coast, another Singapore-based trader said.
A Supramax vessel will cost $13.20/mt for the East Kalimantan to India’s east coast and about $15/mt to the west coast, a Singapore-based broker said.
A Supramax fixture between South Kalimantan and India East was reportedly concluded at $12.50/mt and vessel owners are asking for $12.85/mt, while charterers are asking for $12.50/mt, according to a India-based shipbroker.
CAPESIZE LOSES STEAM
Earlier in the week, Capesize rates faltered which led to some market participants speculating that Panamax rates could fall in tandem.
According to the Baltic Exchange, the daily time charter rate for Capesize vessels on September 27 was $38,023, falling to $36,425 on September 30 and rising back to $37,119 on October 3.
Baltic Exchange data showed the daily time charter rate for Panamax and Supramax vessels at $14,388 and $11,279 on September 30. On October 3, the daily time charter rates for Panamax and Supramax vessels were $14,932 and $11,512 respectively.
“The Panamax and Supramax market segments are expected to cool off this week,” a Singapore-based coal trader had said earlier this week.
“The downward correction in the Capesize segment was expected by the majority of the market, but the sentiment is still overall positive especially as big commodities traders are becoming increasingly interested in period fixing for the final quarter of the year and thus locking current rates,” according to Greek shipbroker Intermodal’s weekly report on Tuesday.
These big commodities traders are understood to include Archer Daniels Midland, Cargill and Louis Dreyfus, according to the broker.
Capesize freight rates are expected to pick up after the Chinese Golden Week holidays which makes most vessel owners hesitant to fix this week, broker Fearnleys said in its weekly note on Wednesday.