Earnings, or time charter equivalent rates, for Panamax and Supramax vessels traded out of the key Indian Ocean region have sank more than 50% over the past month mainly because of lower-than-expected demand for South American grain and reduced coal exports from South Africa.
S&P Global Platts TCE rate for an 81,000-dwt vessel delivered at east coast India for a trip from South Africa’s Richards Bay Coal Terminal to Paradip on India’s east coast was assessed at $5,116/day on May 31, down 65.52% from $14,838/day on April 18.
The TCE rate for a 57,000-dwt Supramax vessel performing a similar trip was assessed at $4,291/day, down 53.94% from $9,317/day on April 20.
The voyage charter rate on a Panamax vessel to move a 75,000-mt (plus/minus 10%) coal cargo from RBCT to Paradip was assessed at $8.75/mt on May 31, down $5.20/mt from $13.95/mt assessed on April 18.
On the Supramax vessel, the voyage charter rate to move a 50,000-mt (plus/minus 10%) coal cargo from RBCT to Paradip was assessed at $10.75/mt on May 31, down $3.35/mt from $14.10/mt assessed on April 20.
The TCE and voyage rates for Panamaxes and Supramaxes loading out of the Indian Ocean market have remained languid due to wobbly demand for South African coal following a spike in prices during the second half of May. The price of 5,500 kcal/kg NAR South African coal on a FOB basis was $65.50/mt on May 31, up from $61/mt on May 12, Platts data showed.
Meanwhile, given fewer ships in general open in the Atlantic region for their next employment, vessels getting released in the Asia-Pacific region will ballast over to that region during grain export season, even though demand is currently lower than expected.
“While ballasters [moving to east coast South America in search of grain cargoes] are keeping a tab on the markets, demand from other commodities too is missing,” said a Singapore-based ship operator, adding that iron ore shipments out of west coast India have almost come to a standstill because of monsoon season.
An India-based ship operator said some shipowners were less willing to lock in at a lower rate for a longer duration out of east coast South America. Instead, shipowners were more keen to do a shorter trip within the Indian Ocean, while waiting to see if rates improved out of east coast South America, he added.