Freight rates for US Gulf coast Supramax vessels are pushing higher on grain demand and tight vessel supply while larger Panamax and Capesize bulker rates decline in the Atlantic basin, says an article published on their website.
Coke voyages
Rates for Supramax petroleum coke voyages from the US Gulf coast to Rotterdam are at $19.45/t today, up over 8pc from $17.95/t on 14 March.
In comparison, coal voyages from the US east coast to Rotterdam on Capesize and Panamax bulkers are at $12.35/t and $12.55/t today, down by 4pc and 2pc, respectively, over the same period.
Cargo versatility compared
The recent gains in Supramax rates have been driven by demand for smaller grain cargoes and tight tonnage in the region.
Supramax bulkers specialize in carrying many different “minor bulks”, such as fertilizers and petroleum coke, affording the smaller bulkers more cargo versatility compared with the larger, Panamax and Capesize bulkers.
Railway capacity
Capesize bulker rates in particular are susceptible to dipping when their primary commodity, iron ore, faces headwinds, such as the landslide in Brazil that cut railway capacity to iron ore mines last week.
Grain corridor deal
Atlantic Panamax rates have also dropped as the Chinese demand for Panamax-sized grain cargoes that helped to clear tonnage in the region over the last two weeks may now be shifting back to Ukrainian product following the renewal of the Black Sea grain corridor deal with Russia.
Petroleum coke demand
Petroleum coke demand, a major driver for the US Gulf coast Supramax market, remains muted in comparison with the strong grain demand in the region, according to shipbroker Banchero Costa.
Swap thermal fuels
“Should the usual flow of coke materialize, we could expect a strong increase of rates in the area,” the shipbroker said.
Petroleum coke, a byproduct created by oil refiners, is commonly used in the production of cement, especially by major importer India. But cement producers in the country can swap thermal fuels for their kilns depending on the market, leading to situations like cheaper South African coal supplanting US gulf petroleum coke in February.
Loading petroleum coke
Supramax tonnage along the Southwest Pass, one of the main routes to open water at the mouth of the Mississippi, is heavier than elsewhere in the Gulf with 15 Supramax bulkers navigating the waterway, according to AIS data, with many likely to load grain cargoes in Louisiana.
In comparison, only two Supramax bulkers can be seen loading petroleum coke near Port Arthur, and only three Supramax bulkers are currently transiting the Houston ship channel.
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Source: Argusmedia
