Panamax charter rates slide further: Weak grain shipping undermines demand

20.12.2016

Charter rates for midsize bulk carriers have plunged further as bookings of vessels to transport grain from the U.S. to China taper off.

The global average of charter rates for Panamax-class vessels, which carry up to 80,000 tons of cargo, is currently around $9,000 a day, having dropped 30% in the past 10 days.

The slowdown in Panamax charters has resulted in an easing of shipping supply and demand in the Atlantic Ocean region, which has numerous grain shipping locations. The average fare in that region is around $12,000 a day, a decline of more than 30% from the recent high in early December. Strong inquiries for coal carriers have not been enough to compensate, resulting in a drop even more striking than the 25% decline in the Pacific Ocean region.

Charter rates are falling rapidly even for the largest bulk carriers, which transport iron ore, due to slowing demand growth. In the view of one major shipping broker, coal shipping demand will climb and charter rates will rebound after the start of the New Year if temperatures fall.


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