- Utility buying supports demand
- Ample tonnage weighs on rates
South Korea remained active in the Pacific Panamax coal freight market, with state-owned utility Korea Electric Power Corporation (KEPCO) continuing to secure vessels for its thermal coal imports. However, freight levels extended their decline amid ample vessel availability and subdued regional sentiment.
In its latest tender, KEPCO fixed a Panamax vessel to transport an 80,000 tonne (t) coal cargo from NPLCT, Indonesia, to Yongheung, South Korea. The cargo is scheduled to load between 28 June-7 July 2026, with the fixture concluded at $9.68/dmt on FIO terms.
The latest fixture marks a further decline from KEPCO’s previous tender, where the vessel Polaris was fixed at $10.92/dmt a week ago for an 80,000 t coal shipment from Taboneo, Indonesia, to Taean, South Korea, loading during 20-29 June. The sharp reduction of $1.24/dmt, or around 11%, indicates continued weakness in Pacific Panamax freights as vessel supply outpaces cargo demand.
Despite softer freight levels, South Korean utilities continue to actively procure Indonesian coal, supporting cargo volumes in the Pacific market. Market participants noted that Indonesia-origin coal remains attractive due to shorter voyage durations and competitive delivered costs compared with alternative origins.
While steady utility demand is providing some support to the Panamax segment, market participants expect freight rates to remain under pressure in the near term unless cargo enquiries improve significantly or vessel availability tightens.
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