Supramax earnings climb on coal and grain trades

Earnings for 58,000 dwt supramax bulkers have reached their highest since September 2016 based on active coal and grains trades in the Pacific and the Atlantic basins.

News ID: 80212

Date: 22 September 2018 - 09:05

Some brokers view the uptick as a temporary high as coal imports into China may start to slow following week-long holidays

SUPRAMAX earnings hit the highest level for a 58,000 dwt vessel since September 2016 when the Baltic Exchange introduced the sector’s new index as a trial.

The average weighted time charter reached $12,942 per day at the close on Thursday on the London-based shipping exchange.

That compares with $12,491 at the start of the month and $11,204 in early July.

Affinity Research said that sentiment had turned positive, with Southeast Asian markets particularly active, with coal fixtures gaining. On the east coast of South America, the market was bullish, driven by grains.

Affinity expects that the usual improvements that come in the fourth quarter may be starting “a couple of weeks earlier this year”.

According to Fearnleys, US Gulf trips to the Far East were concluded in the mid-$20,000 per day range, while to northwest Europe, levels around $20,000 per day were seen being fixed.

Sugar cargoes from Santos to southwest Africa were meanwhile done at $18,000 per day, while nickel ore rounds in the Pacific were concluded at $15,000 per day, the brokerage said in a note

Grains were moving from the US to Japan at $26,500 per day, with a voyage from Egypt to Southeast Asia at $22,000 per day, according to the Baltic Exchange.

It added that trades in Asia were booked in the $11,000 per day range, with a salt cargo fixed at $10,000 per day.

However, a trader based in Singapore said that the bullish streak might be temporary.

The recent surge in freight rates had come mainly because of the increased fixing activities before China and South Korea go on week-long holidays, which may result in muted inquiries, the trader said.

In addition, domestic supply of coal in China might suffice for the fourth quarter without relaxing import restrictions.

That could be a negative for supramaxes and panamaxes, which rely on China’s imports of coal.

Moreover, coal consumption across China has slipped in the past week as the temperature cools, which has led to rising stockpiles, adding to an already weakening near term demand outlook, the trader said.

Supramax earnings climb on coal and grain trades

Earnings for 58,000 dwt supramax bulkers have reached their highest since September 2016 based on active coal and grains trades in the Pacific and the Atlantic basins

Some brokers view the uptick as a temporary high as coal imports into China may start to slow following week-long holidays

SUPRAMAX earnings hit the highest level for a 58,000 dwt vessel since September 2016 when the Baltic Exchange introduced the sector’s new index as a trial.

The average weighted time charter reached $12,942 per day at the close on Thursday on the London-based shipping exchange.

That compares with $12,491 at the start of the month and $11,204 in early July.

Affinity Research said that sentiment had turned positive, with Southeast Asian markets particularly active, with coal fixtures gaining. On the east coast of South America, the market was bullish, driven by grains.

Affinity expects that the usual improvements that come in the fourth quarter may be starting “a couple of weeks earlier this year”.

According to Fearnleys, US Gulf trips to the Far East were concluded in the mid-$20,000 per day range, while to northwest Europe, levels around $20,000 per day were seen being fixed.

Sugar cargoes from Santos to southwest Africa were meanwhile done at $18,000 per day, while nickel ore rounds in the Pacific were concluded at $15,000 per day, the brokerage said in a note

Grains were moving from the US to Japan at $26,500 per day, with a voyage from Egypt to Southeast Asia at $22,000 per day, according to the Baltic Exchange.

It added that trades in Asia were booked in the $11,000 per day range, with a salt cargo fixed at $10,000 per day.

However, a trader based in Singapore said that the bullish streak might be temporary.

The recent surge in freight rates had come mainly because of the increased fixing activities before China and South Korea go on week-long holidays, which may result in muted inquiries, the trader said.

In addition, domestic supply of coal in China might suffice for the fourth quarter without relaxing import restrictions.

That could be a negative for supramaxes and panamaxes, which rely on China’s imports of coal.

Moreover, coal consumption across China has slipped in the past week as the temperature cools, which has led to rising stockpiles, adding to an already weakening near term demand outlook, the trader said.