As per media reports, Panamax dry bulk vessel rates have surged 18% over the past month to near five-year highs amid strong Pacific coal transportation demand and a lingering Chinese appetite for Brazilian soybeans.
Laurence Walker a reporter from Montel News who covered this incident wrote that the Baltic Panamax Index which was last assessed at 1,793 points, was not breached in this process.
Why this surge?
“Coal activity in the Pacific continues to be very high, particularly for shipments to China and India,” said an analyst with a large European shipbroking firm.
“Southern Chinese consumers are still relying on imports, as there have been stricter government inspections on domestic production [quality] than on imported coal,” he said.
China and India have been sourcing much of their coal from Indonesia and Australia, but also from South Africa and the US, he said, noting this related to both thermal and coking coal supplies.
Positive Outlook
Peter Lindstrom, head of research for shipowner Torvald Klaveness, said the outlook for freight rates in 2019 was largely positive.
“India and emerging Asian [economies] coal imports will continue to grow,” he said this week at the Coaltrans conference in Barcelona.
He also pointed to the prospect of low fleet growth and a “positive outlook on grains”.
Soybean Export Hope
The first analyst also pointed to the bullish impact on freight of ongoing Chinese demand for Brazilian soybeans, particularly in light of restrictions to purchases of US output.
China placed a 25% import tariff on US soybeans, in retaliation to president Donald Trump’s tariff hikes on Chinese goods.
Panamax vessels are generally 60,000-80,000 deadweight tonnes, and employed for the transportation of various dry bulk goods, such as coal and grains.
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Source: Montel News
