Panamax coal freight rates on established routes from South Africa's Richards Bay and Indonesia to India jumped Friday due to a large number of fixtures for grain cargoes in the Atlantic basin, market participants said.
"Some of the credit for this stronger market must go to the ECSA [east coast of South America] grain season still going strong and continues to absorb vessels from the Atlantic and from the Pacific as well," broker Fearnleys said in its weekly note on Wednesday.
Platts assessed the daily Panamax freight rates from South Kalimantan to India's east coast at $9.50/mt, up 50 cents from Thursday and up $1 week-on-week, and to the west coast at $10.70/mt, up 70 cents from Thursday and up $1.20 week-on-week.
Platts also assessed the daily Panamax freight rates from Richards Bay to India's east coast at $16.50/mt, unchanged on-day and week-on-week, and to the west coast at $16/mt, up 50 cents both on-day and on-week.
"It has been a busy week in the Panamax market. The Atlantic is experiencing a moderate and much awaited lift," the broker said.
Congestion in South America is pretty high, and that should boost Panamax freight rates, positively affecting other segments like Supramaxes and Capesizes as well, an India-based source said.
"We see more mixed signals in the Pacific, with some players being negative, but still the fixtures that are done are improving slowly and have now reached around $9,000-10,000/day for rounds," Fearnleys said.
Panamax freight rates are steady at around $9,400/day, Erik Nikolai Stavseth of Arctic Securities said in a daily note on Friday.
The Pacific market is steady to firm but, however, as the week has passed, trading has slowed and charterers are now holding back, broker Braemar Seascope said in its weekly note on Thursday.
There are plenty of vessels, including newbuildings on offer, the broker said.
CAPE ACTIVITY STRONG
Fixture activity for Capesize vessels was strong, but that had not translated to higher freight rates, market participants said.
"It's been a busy week in the Pacific, with active West Australia miners fixing anywhere up to 15-20 ships," Braemar said. "The Capesize market continues to be dominated by the Pacific. However, despite significant activity we are yet to see rates rise." May dates saw $7.15/mt and $7.10/mt fixed from western Australia to China for iron ore cargoes on Capesize vessel, which was "somewhat disappointing" given the volumes currently being moved, the broker said.
Capesize freight rates remain virtually unchanged at $4,300/day, Stavseth said.
The average Capesize freight rate year-to-date is $5,800/day -- not enough to cover basic operational expenses, he said.
"[For] Panamaxes and Supramaxes the situation is somewhat better as year-to-date earnings are $7,400/day and $8,300/day," he added.
