Panamax coal freight rates end week lower, after recent strengthening
Singapore (Platts)--30Nov2012/520 am EST/1020 GMT
Panamax coal freight rates on established routes from South Africa's
Richards Bay and Indonesia to India ended the week lower Friday with sources
expressing skepticism over whether a rise seen over the past few days was
sustainable in the short term.
"Freight rates are at an all-time low and it's getting worse every day,"
a Singapore-based source said. "The first quarter of next year is expected to
be much weaker for freight [rates]."
Platts assessed the daily Panamax freight rates from Richards Bay to
India's west coast at $15.10/mt and to the east coast at $16.30/mt, both
unchanged on-day, but down 30 cents week-on-week.
Platts also assessed the daily Panamax freight rates from South
Kalimantan to India's west coast at $10.80/mt and to the east coast at
$9.70/mt, both unchanged on-day, but down 10 cents week-on-week.
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The "fairly tight" tonnage lists in most major trading regions had
helped Panamaxes register a significant week-on-week boost, Greek shipbroker
Intermodal said in its weekly note on Tuesday, with shipowners pushing
charterers for higher rates.
"There may be talks of the current improvement [for Panamaxes] being
temporary, however, it seems as though owners are pushing to get the most out
of it in the hope of finally escaping from the poor performance levels of the
past couple of months," Intermodal said.
Coal movement continued to support Panamax freight rates in the Pacific
basin, a second Singapore-based source said.
Shipowners were preferring to head to the east coast of India despite a
lack of return cargoes as a strategic vessel positioning would help them
command a premium, he added.
"Either they can ballast five or six days to Singapore where they can
command a premium or head to Australia from the east coast of India," he
However, shipowners were still reluctant to ship cargoes to the west
coast of India due to the lack of return cargoes and higher piracy risk, and
usually demanded a premium of at least $1.50/mt to do so.
Pacific basin has begun to lose sheen as cargoes from North Pacific
(NoPac) region have been hard to come by, broker Braemar Seascope said in its
weekly note on Thursday.
"A softer feel in the Pacific this week, with NoPac still lacking in
cargoes and charterers claiming to see 30 plus Panamaxes able to make NoPac
in December," the broker said.
Panamax shipowners want to enter into agreements for a longer duration
to secure a decent income over the coming holidays, broker Fearnleys said in
its weekly note on Wednesday.
"That might push up rates in the near term, but it can go either way," a
third Singapore-based source said.
Elsewhere in the Atlantic basin, front-haul activity had started to
dampen with most prompt requirements having already been covered, Braemar
Due to the low water levels in the Mississippi river, there have been
some logistical issues in delivering grains to the loading facilities in the
US Gulf (USG), translating into a price premium, and the USG grains had
become less competitive compared with NoPac grains, the broker said.
"As a consequence, there has been fewer buying interest for USG grains
and fresh stems have been slow to develop, contributing to a general slowdown
in front-haul activity," Braemar said.
Even Capesizes seem to have lost direction after rising this past few
days, the second Singapore-based source said.
"The Cape market this week has drifted slightly, with West Australia the
only market rising -- albeit tentatively," Braemar said.
"Owners are still hoping for one last push before the end of the year,
however a lack of cargo from Brazil is hindering further gains and creating a
question mark over the decision to ballast," the broker added.
--Deepak Kannan, firstname.lastname@example.org
--Edited by James Leech, email@example.com