The Panamax dry bulk vessel rates have surged to a whopping 18% over the past month to near five-year highs amid strong Pacific coal transportation demand and a lingering Chinese appetite for Brazilian soybeans.
Baltic Panamax Index
The Baltic Panamax Index was last assessed at 1,793 points, a level not breached since December 2013. An analyst with a large European shipbroking firm said, “Coal activity in the Pacific continues to be very high, particularly for shipments to China and India. Southern Chinese consumers are still relying on imports, as there have been stricter government inspections on domestic production [quality] than on imported coal”.
China and India key players
China and India have been sourcing much of their coal from Indonesia and Australia, but also from South Africa and the US, related to both thermal and coking coal supplies.
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, the prospect of low fleet growth and a positive outlook on grains”.
Soybean support
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
