A major disruption in the typical seasonal flow of U.S. soybean exports to China, caused by trade tensions, is having a noticeable impact on the Panamax dry bulk freight market.
Trade Disruption Overview
China’s decision to suspend U.S. soybean imports as a retaliatory measure against U.S. tariffs has severely curtailed a critical seasonal trade flow.
- Trade Stoppage: No U.S. soybean shipments have arrived at Chinese ports this season.
- Lost Volume: Over one million tonnes of soybean trade was already lost in September, and a substantial 12 million tonnes remains at risk for the peak shipping months of October and November.
- Typical Volume: Under normal circumstances, China imports between 25 million and 30 million tonnes of U.S. soybeans annually, with approximately 13 million tonnes arriving between September and November.
Impact on Panamax Fleet
The absence of this massive seasonal trade directly reduces the demand for the Panamax vessel segment.
- Cancelled Voyages: The loss of the October-November trade is equivalent to the removal of approximately 180 to 190 Panamax voyages.
- Tonne-Mile Loss: This volume typically generates around 120 billion tonne-miles during the two months.
- Demand Reduction: This lost demand accounts for nearly 12% of the total Panamax tonne-mile demand for October and November, which averages about 1,037 billion tonne-miles.
Market Sentiment and Freight Rates
The disruption’s impact is already visible in the forward freight market, leading to pressure on rates.
- Weakened Sentiment: Sentiment across the mid-size vessel segments has weakened due to the potential for lost employment during a peak season.
- October Decline: The Panamax P5TC Baltic Forward Freight Agreement (FFA) for October 2025 showed a 9% decline as of October 6, 2025, compared to the September average rate.
- Forward Curve Softness: The forward curve projects further rate softness, with the November and December contracts down by 12% and 15%, respectively.
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Source: Drewry
