India: Coal vessel freight rates head south on subdued cargo demand

• Lack of cargo availability weighs on market
• Baltic Dry Index (BDI) touches lowest point

India’s coal freights dropped this week amid subdued market activity and decreased demand for shipping services in the pre-holiday period. The absence of new cargo orders, coupled with limited trading activity across the Pacific and Indian Ocean regions, resulted in an oversupply of vessels, intensifying downward pressure on freight rates. Seasonal slowdowns and global economic uncertainties further dampened demand for coal transportation.

Notably, thermal coal stocks at Indian ports recorded a slight increase of 0.5% to 13.35 million tonnes (mnt) in week 51 from 13.29 mnt in week 50 of calendar year 2024 (CY’24), according to BigMint’s data.

Baltic indices decline w-o-w: The Baltic indices, which indicate trends in vessel demand, largely down w-o-w, suggesting weak demand. The Baltic Dry Index (BDI) was recorded at 990 points on 23 December, down by 61 w-o-w. Meanwhile, the Baltic Panamax Index (BPI) edged down by 19 points to 976 on 23 December against 995 on 16 December. Meanwhile, the Baltic Supramax Index (BSI) was assessed at 940 points on 23 December, inching down by 19 points w-o-w.

Route specifications

• Australia-India rates drop w-o-w: Freights from Australia dropped $1.6/tonne (t) w-o-w, with BigMint’s assessment indicating that rates for Hay Point Port to Paradip were at $11.5/dry metric tonne (dmt). Sources informed that SAIL booked two Panamax vessels from Hay Point Port to East Coast of India at $11.30-12.9/t, with shipment scheduled for late January to early February.
• South Africa-India freights decline w-o-w: Freights from the Richards Bay Coal Terminal (RBCT) to Paradip stood at $11.60/t, down by $0.4/t w-o-w. Seasonal variations and absence of fixtures have pressuring freight rates.
• Indonesia-India freights stable w-o-w: Freights for coal shipments from East Kalimantan to Paradip stood at $11/t, remained firm w-o-w. The shorter distance between Navlakhi and Paradip compared to international routes have supported the freight rate. However, no fresh fixtures have been recorded in this route.