Coal news and updates

Panamax coal freight rates steady, but on shaky ground

The Panamax coal freight market was mostly flat, with tonnage leaving the Pacific to pick up grain cargoes emerging from east coast South America preventing rates from falling Wednesday, market participants said.

The Panamax coal freight market was supported Wednesday by thin tonnage especially in the Pacific, with Panamax shipowners choosing to ballast to east coast South America to pick up grain cargoes emerging first half April dates rather than stay in the Pacific, market sources said.

One broker said rates for April 1-10 cargoes were between $41/mt and $43/mt from east coast South America to China.

"East coast South America [market] in April is steady after recent firming," said another broker, but added that spot ships that are open for March dates are still struggling to find cargo. "It's a two-tier market there."

The spot coal freight market was also supported by stronger period activity.

"Most of the owners are preferring short periods, at about $14,500/day levels," the first shipbroker said. "That's taking tonnage out of the Pacific" on spot, he said.

Platts assessed the Panamax coal freight rates from Banjarmasin port in Indonesia's South Kalimantan to west coast India's Mundra port at $11.25/mt, unchanged from Tuesday. The route from Banjamarsin to Paradip port on India's east coast was assessed at $10.25/mt, also unchanged from Monday.

"Owners are still sticking to their numbers but charterers are not really chasing them up, [preferring] to see where the market decides to head," another broker said Wednesday.

Also assessed was the Richards Bay to Mundra route at $17.50/mt and to Paradip at $18/mt, both unchanged from Tuesday.

"Richards Bay is a bit flat but maintaining," another charterer said.

RATES ON SHAKY GROUND

The uptrend in Panamax coal freight rates seen earlier this week may be close to its end, market participants polled Wednesday said, citing weak FFA numbers and a cooling Capesize market.

Panamax time charter March paper traded at $9,750 on Tuesday (eds: day correct), falling $550, April at $12,750, falling $1,050 while Q2 paper traded at $13,475, falling $700.

"Paper is off a bit, Capesize is also struggling to keep recent momentum," one of the brokers said.

Platts assessed the Capesize market at $9.50/wmt on Wednesday on the Western Australia to Qingdao route, falling $1.55 from Wednesday.

"Indonesia rates seem steady still, as it remains quite tight for tonnage down south," another broker said. "But with the paper market continuing to take hits we are on pretty shaky ground."

Source: Platts