Trans-Atlantic Panamax Market Crippled by Cargo Shortage

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  • Lack of cargo stems throughout May
  • Day rates for USEC-Transatlantic run down 39% on month

The trans-Atlantic Panamax market faced a bearish trading month in May, plagued by a severe shortage of cargo, according to market participants.

Market levels plummeted throughout the month, with Platts assessing freight for the 70,000 mt, plus or minus 10%, Hampton-Rotterdam coal route at $12.50/mt on June 4. Platts is part of S&P Global Commodity Insights.

Market participants pointed to softer time charter rates in the low $10,000s/d. This contrasts sharply with last month’s levels, where Platts assessed freight at $20.50/mt on May 9, and time-charter rates hovered around the mid-$17,000s/d.

A shipbroker commented on the deteriorating fundamentals, said a complete lack of cargoes was defining the market.

“The tonnage list is not long, but cargoes are missing,” he said. “Also, owners not obliged to stay in the Atlantic are now looking at fronthauls.”

Indicative bids have dipped to $8,000 compared to offers at $12,000 for typical trans-Atlantic runs.

Notably, a fixture reported the week ended May 31 saw the 83,975 dwt, 2013-built Seneca fixed to open retro in Gibraltar on May 23 via the US Atlantic Coast, with redelivery in Gibraltar-Passero at $12,500/d with Swissmarine.

Shipments of coal cargoes via Kamsarmax ships from the US to Northwest Europe and the Mediterranean regions remained sparse in May. According to S&P Global Commodities at Sea data, there was one shipment to Northwest Europe each week, with a total of only two shipments to the Mediterranean throughout the month.

A second shipbroker observed limited cargoes for mid to late June dates, with little to no bids.

“That’s three trans-Atlantic cargoes in the Atlantic, which is nothing,” he said. “The market is dead.”

Another source expressed optimism for the future.

“There are no vessels nominated for our typical runs carrying coal cargoes from Norfolk to the Continent,” he said. “However, this situation is temporary, as there are shipments lined up in the near-term.”

In recent developments, CAS data showed a notable increase in US seaborne thermal coal exports in the week ending June 2, rising by 23.3% to reach 941,527 mt. Among the top destinations for US thermal coal exports were the Netherlands, which received 150,993 mt, marking a substantial rise from zero shipments in the preceding week. Additionally, Egypt imported 90,016 mt of US thermal coal during the same period.

With the Posidonia shipping exhibition in Athens in full swing, many market participants are anticipated to be away from their desks, delaying the conclusion of deals. The outlook remains soft, with activity expected to pick up in the coming weeks.

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Source: S&P Global

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