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Panamax freight rates see better-than-expected Q4



Q4 2016: Dry Bulk Shipping Overview





Q4 2016 - The Panamax vessels in the Asia Pacific saw their best returns for 2016 during the fourth quarter. Charterers had to pay up entice shipowners to ply on shorter routes within the Pacific.


Many shipowners chose to ballast their vessels out of the Pacific during the first half of Q4 2016 to meet the front haul grain demand out of east coast South America and also the US Gulf. Cheap bunker prices were an encouragement for vessels to be ballasted to the US Gulf even from the Indian coast.


The firmer iron ore prices came as boon to the Panamax markets, with increased shipments out of India, adding support to the rates for vessels opening in the Indian Ocean.


Over the same period, shipments of coal were steady within the Pacific. The freight rate to move 75,000 mt (plus/minus 10%) of metallurgical coal from Hay Point in eastern Australia to Qingdao in China averaged $8.71/mt between October 1 and December 21, up 17.33% from the average for Q3 at $7.43/mt. The route was assessed at its highest value for 2016 at $9.45/mt on December 7, two fold higher than the $4/mt seen on January 28.


Analysis continues below...


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While a better than expected Q4 has influenced market players into a more positive outlook for 2017, most still remain skeptical that fundamentals can come up to support the view indicated by sentiment.


Next route: Atlantic Panamax market has a roller coaster Q4 2016







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