- Panamax rates in the Pacific soared to multi-year highs on the back of icy sea conditions in the Atlantic.
- This is attributed to the spike in grain loading out of east coast South America, or ECSA, and a pick-up in European coal demand.
- The firm freight rate on ships loading out of ECSA is forcing charterers to shell out more for voyages within the Pacific region.
- The key Hay Point, Australia, to Paradip, east coast of India, trip to move a 75,000 mt (plus/minus 10%) coal cargo was assessed at $25.40/mt on Feb. 18.
- It is the highest since September 2010, when this route was assessed based on a cargo size of 65,000 mt.
A recent news article published in the Platts written by Isaac Eio and Carina Li deals with the panamax rates in Pacific that got hit multi-year highs due to the surge in the Atlantic demand.
Panamax rates in the Pacific
Panamax rates in the Pacific have also rallied as east coast South America freight levels made huge advances, thanks to the busy soybean loading season.
Panamax class bulkers passing Singapore are quoting around $25,000/day for a trip to ship soybean from ECSA to the Far East.
The late harvest of soybean in ECSA for 2021 due to droughts in the region and a long Lunar New Year holiday period in China have done little to slow the Panamax freight rally.
Rates moved up
Rates started to move up early this week after Kamsarmax ships, typically in the 81,000-82,000-dwt range, got fixed at $16,500/d from Southeast Asia to perform ESCA round voyages.
The bullishness soon spread as charterers looked to smaller and larger vessel sizes to avoid the high rates on the Panamax ships.
“The market is firming up every day [this week],” a Greek shipbroker said, crediting the gains to the bullish Panamax market.
Merging, splitting of Panamax-sized cargoes
In the Pacific market, a 75,000 mt (plus/minus 10%) coal cargo for an Indonesia to Vietnam trip was reportedly split to two 35,000 mt (plus/minus 5%) Handysize stems.
From Richards Bay in South Africa, Panamax cargoes are being combined to be shipped on Capesizes for voyages into India, as many owners prefer the longer ECSA journey.
“Big market movement on the Panamaxes offer more potential for Capesize ships,” a fourth shipbroker said.
With Panamax freight getting expensive, a few charterers are trying various options to cut costs.
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