Panamax Ship Rates Advance as Coal and Grain Cargoes Seen Rising

Rates for Panamax vessels shipping grains and coal rose for a sixth session, amid speculation that demand to haul both cargoes is increasing.

Earnings from the ships, hauling about 75,000 metric tons of cargo, rose 2.1 percent to $9,326 a day, according to the Baltic Exchange in London. They’re the largest ships to navigate the Panama Canal. Costs for the Baltic Dry Index, a wider measure of freight, advanced 0.6 percent to 885 points. Two vessel classes within the gauge rose and two fell.

Charters for ships to load Latin American grains and soybean cargoes advanced to 19 last week from seven in the prior seven-day period, Jeffrey Landsberg, president of Commodore Research in New York, said by phone today. China is also importing more Australian and Indonesian thermal coal for its power stations because of maintenance to a railway that handles domestically mined supply of the fuel, he said.

“The increase in both these demand sides has been enough to help the market,” said Landsberg, whose company advises ship owners. Delays loading at ports in Latin America are curbing the supply of vessels, he said.

Capesize vessels, the largest ship type monitored by the Baltic Exchange, declined 1.6 percent today to $4,480 a day, according to the bourse. Smaller Supramaxes fell 0.1 percent to $9,403 while Handysizes advanced 1.1 percent to $7,984.

Rates may gain in the second half of the year because of Chinese demand for coal and iron ore, Pareto Securities AS, an Oslo-based investment bank, said today.

“We are fundamentally optimistic on dry bulk, encouraged by Chinese dry-bulk import growth,” Nicolai Hansteen, chief economist of Pareto Shipping, a unit of Pareto Securities, said at a conference in Copenhagen. “The second quarter is going to be a very weak quarter, but we expect to see a recovery in freight rates in the second half of this year, driven by Chinese imports.”

To contact the reporter on this story: Alaric Nightingale in London at anightingal1@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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