In this list
Coal | Electric Power | Metals | Shipping

Asia-Pacific Supramax, Panamax rates plunge on poor commodities demand, weak China recovery

Agriculture | Shipping | Dry Freight

Platts Dry Freight Wire

Petrochemicals | Polymers

Buyers’ choice: Global oversupply of single-use plastics makes recycling uneconomical

Oil | Energy Transition | Energy

APPEC 2024

Energy | Natural Gas | LNG | Energy Transition | Emissions

Biden directive pushes wider use of climate cost metric in US agency actions

Metals | Energy | Coal | Coking Coal

Platts Premium Low Vol Coking Coal

Agriculture | Energy | Energy Transition | Petrochemicals | Oil | Sugar | Biofuels | Renewables | Hydrogen | Emissions | Carbon | Aromatics | Olefins | Refined Products | Jet Fuel | Crude Oil | Naphtha | Polymers

Bionaphtha for plastics: a building block towards sustainability

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

Asia-Pacific Supramax, Panamax rates plunge on poor commodities demand, weak China recovery

Highlights

Lackluster Chinese economic recovery curtails dry bulk activity

Healthy China domestic energy supplies limit coal imports

  • Author
  • Nicholas Zhang
  • Editor
  • Ankit Ajmera
  • Commodity
  • Coal Electric Power Metals Shipping

Asia-Pacific Supramax and Panamax time-charter equivalent rates in the second quarter of 2023 have so far more than halved from Q2 2022 because of weak Chinese commodities demand and fewer congestions at ports, dry bulk market participants said June 9.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The Platts APSI 5 Index, a ton-mile weighted average index of five Supramax routes within the Asia-Pacific, plunged to $10,230/d over April 1-June 8, from an average of $25,814/d for the whole of Q2 2022, S&P Global Commodity Insights data showed.

The Platts KMAX9 Index, a global ton-mile weighted average of nine Panamax routes, slumped to $12,223/d over April 1-June 8, from an average of $25,525/d in Q2 2022.

Poor Chinese import, export activity

Dry bulk shipping rates typically strengthen in the second quarter following a seasonally weaker first quarter as China, which is among the world's top consumers of dry bulk commodities, resumes trading following the Lunar New Year, and warmer temperatures increase coal demand to meet electricity needs in South Asian countries.

Slow Chinese real estate and infrastructure development this year has weighed on demand for major commodities such as iron ore and coal, while tepid global consumption of Chinese goods has reduced export volumes, hurting dry bulk shipping rates, said a ship-chartering source with a commodities trader.

Lower-than-normal temperatures in India during the quarter have also driven coal demand and freight rates lower.

Meanwhile, domestic coal stockpiles in China have been healthy. Chinese utilities possessed ample coal stockpiles, which could sustain coal burn of at least 20 days, a shipbroker source said, adding that Chinese domestic coal prices were more attractive than seaborne coal prices.

Favorable weather conditions in the second quarter have led to sufficient supply of hydroelectric power within China, reducing the need for Chinese buyers to procure spot seaborne coal cargoes to meet their energy needs.

"[We] need to see more coal imports into China [for a market rebound]," a Singapore-based ship-operator source said. A sustained recovery of China's economy is seen as crucial for a rebound in dry bulk shipping rates, as that would translate into greater energy needs and potentially higher seaborne coal demand.

Global economic growth slows

Shipping market participants said slowing global economic growth was another factor that has hurt a recovery in commodities demand in the second quarter, however abnormal climate conditions in parts of Asia lately could potentially pave the way for an increase in coal demand to meet higher power consumption.

"Weather patterns seems unpredictable and uncertain, and this might lead to more demand for power," a second ship-operator source said. Sustained warmer temperatures over the coming weeks might lead to more coal demand and support dry bulk shipping rates, the ship-operator source said.