India: Coal vessel freights ease amid demand-supply imbalance

• Vessel oversupply and cautious chartering activity
• Baltic Panamax and Supramax segments fall

Coal freight rates to India declined this week following a supply-demand imbalance in the Asia-Pacific Panamax segment. The market is currently experiencing a surplus of tonnage availability, especially in the Pacific basin, while cargo demand remains subdued.

Despite some replenishment of coal cargoes, particularly from Australia and Indonesia, the volume of fixtures has not been sufficient to support freight rates. Charterers have continued to exercise caution and delay fixture finalisation, leading to a lack of urgency in the market. This mismatch has weighed heavily on rates, preventing any meaningful recovery.

The fall in Supramax coal freight rates to India is mainly driven by subdued cargo demand and sluggish trading activity across the Asia-Pacific region. Despite the return of Chinese market participants post-holidays, the Pacific basin, including the Indonesian coal routes, continues to see limited fresh enquiries.

In addition, the Indian Ocean market has shown no signs of revival, with traders and charterers adopting a cautious stance due to weaker commodity prices, particularly for coal. This has led to a lack of urgency in fixing vessels, further dampening the freight environment.

Baltic indices show mixed trends w-o-w: The Baltic indices, which indicate trends in vessel demand, exhibit mixed trends w-o-w, indicating fluctuating interest and activity levels among charterers. The Baltic Dry Index (BDI) was recorded at 1,418 points on 2 June, increasing by 78 points w-o-w. However, the Baltic Panamax Index (BPI) dropped by 127 points to 1,119 points on 2 June against 1,246 points on 26 May. Meanwhile, the Baltic Supramax Index (BSI) was assessed at 951 points on 2 June, edging down by 32 points w-o-w.

Route specifications

• Australia-India rates drop w-o-w: Freights from Australia to India dipped by $1.2/tonne (t) w-o-w, with BigMint’s assessment indicating that rates for Hay Point Port to Paradip were at $13/dry metric tonne (dmt). Freight rates declined due to high vessel availability outpacing demand, limited fresh fixtures, and charterers delaying bookings despite some cargo replenishment.
• South Africa-India freights decrease w-o-w: Freights from the Richards Bay Coal Terminal (RBCT) to Paradip decreased by $2/t w-o-w to $11/t. Freight rates fell amid weak coal demand, ample tonnage in the Indian Ocean, and charterers maintaining downward pressure on rates in a muted market environment.
• Indonesia-India freights remain stable w-o-w: Freights for coal shipments from East Kalimantan to Paradip stood at $13.5/t, largely range-bound w-o-w. According to sources, one Supramax vessel booked from East Kalimantan to Navlakhi at $12.10/t for the shipment period of 16-20 June.