India: Coal freights gain w-o-w amid longer voyages, steady demand

• Tight vessel supply, monsoonal delays lift freights
• Rising bunker fuel costs raise operating expenses

Panamax coal freights to India rose w-o-w across major routes, driven by the repositioning of vessels towards longer-haul trades, which offered improved returns. As coal procurement from origins such as Indonesia, Australia, and South Africa continues to diversify, voyage distances have lengthened, thereby elevating ton-mile demand. This tightened vessel availability, a situation further compounded by monsoonal delays at Indian ports that extended turnaround times, collectively exerting upward pressure on freights.

Indian buyers, particularly utilities and sponge iron producers, increased coal procurement ahead of and during the monsoon to offset potential supply disruptions stemming from inland logistical challenges and port congestion. This seasonal stockpiling fuelled spot demand for Panamax vessels, as buyers sought timely shipments to maintain operational continuity. Even amid range-bound thermal coal prices, the urgency to secure cargoes heightened competition for available tonnage, supporting freights.

At the same time, rising bunker fuel costs and higher voyage operating expenses prompted shipowners to raise freight offers to maintain margins. With Panamax vessels catering to a diverse set of coal load origins – including Indonesia, Australia, and South Africa – the combination of stable Indian inquiries and elevated cost pressures led to a w-o-w increase in freights across key routes.

Notably, portside thermal coal inventories in India were largely stable this week at around 15.86 mnt compared with 15.87 mnt in the previous week. The marginal change reflects steady arrivals balanced by muted demand.

Baltic indices show mixed sentiments w-o-w: Vessel demand indicators saw a mixed trend w-o-w. The Baltic Dry Index (BDI) was recorded at 1,521 on 30 June, decreasing by 168 points w-o-w. However, the Baltic Panamax Index (BCI) stood at 1,490 points, increasing by 140 points against 1,350 points last week. Additionally, the Baltic Supramax Index (BSI) inched up by 36 points w-o-w to 1,009.

Route specifications

• Australia-India rates increase: Freights from Australia to India rose by $0.6/t w-o-w, with BigMint’s assessment indicating that rates for Hay Point Port to Paradip were at $15.3/dry metric tonne (dmt). Sources informed that one Panamax vessel was booked from Australia to Gangavaram at $15.90/t, with shipment scheduled for 25 July-3 August.
• South Africa-India freights rise: Freights from the Richards Bay Coal Terminal (RBCT) to Paradip climbed up by $1.20/t w-o-w to $13.5/t. According to sources, one Panamax vessel was booked at around $14/t from RBCT to Paradip.
• Indonesia-India freights climb up: Freights for coal shipments from East Kalimantan to Paradip inched up by $0.3/t to $13.9/t w-o-w amid steady Indian demand and tighter tonnage caused by monsoonal port delays.