Pacific coal trades lend support to panamax bulkers

Panamaxes lead gains this week thanks to increasing coal trades in the Pacific at a time when available tonnage is getting scarce

News ID: 80201

Date: 13 September 2018 - 10:05

Deutsche Bank sees mid-sized carriers outperforming other dry bulk segments on the back of strengthening coal trades in the Pacific basin combined with higher grains exports in the Atlantic

PACIFIC coal trades are buoying the panamax bulker market, according to Braemar ACM.

As available tonnage grew shorter, rates rose, with fresh inquiries for early October dates especially in the Pacific basin, it said.

Coal fixtures from Indonesia to China saw levels at about $11,500 per day, with the larger kamsarmax vessels fetching $12,000 per day, said the brokerage. It added that activity in the period market increased, with deals at $13,500 per day for four to seven months.

Indonesian coal exports have been rising, according to Doyle Trading Consultants, a unit of Informa.

Exports in July totalled 37.73m tonnes, an increase of 15% from the year-earlier period. In the year to July, shipments were up 11% to almost 245m tonnes. On an annualised basis, that would come to 421m tonnes, or a 7.5% rise from 2017’s level, it said.

The biggest buyer was China, followed by India, according to DTC.

The average weighted time charter on the Baltic Exchange rose to $12,474 per day at the close on Tuesday, up 3.5% versus September 5.

Deutsche Bank said in a report that mid-sized bulkers were outperforming other dry bulk segments as spot rates rose for a fourth week due to the strengthening coal trade, combined with ramping grain shipments from the Atlantic.

Capesize earnings, meanwhile, sank to $16,559 per day on the Baltic Exchange at the close on Wednesday from $18,493 per day a week ago.

According to Braemar, it is hard to see a “quick recovery” in the short term as tonnage remains plentiful. But talk of slow steaming may put an end to the oversupply currently being experienced, allowing some breathing room for the re-positioning of vessels, it says.