Panamax bulkers are benefiting from a resurgence in North American grain exports that are expected to continue in the coming months, according to brokers.

Grain shipments from the US Pacific Northwest have jumped 92% from a year ago as US-China relations improve after a two-year trade dispute that ended this January, according to Braemar ACM Shipbroking.

The boost in volume has been felt primarily in the panamax market, with a jump in the number of these ships loading in Washington, the shipbroker said in a report on dry bulk shipping.

"We recorded 3.8m tonnes of panamax grain shipments from the US west coast in October, a volume nearly four times greater compared to last year," Braemar said.

Panamax grain shipments from this region for the first 10 months of 2020 were up 11% from the same period last year, the outfit noted.

Panamaxes in the Atlantic Basin saw a 57% year-over-year jump in October grain shipments of 10.5m tonnes to China alone at the same time, marking the highest volume since November 2016.

"Here again, the panamaxes have seen the greatest increase in employment, with exports on these ships up by 61% year-over-year overall in October," Braemar said.

Coal exports drop

But panamaxes on the eastern side of North America did not see the same surge in activity as their counterparts in the Pacific Basin did, thanks to lower exports of coal and other commodities.

"On the whole, this seems to have weighed on Atlantic rates, and with relatively few ships opening up in this basin, a large portion of the increased cargo volume has been serviced by the major grain shippers’ own tonnage," Braemar added.

US soybean exports are also on the rise. Photo: Pixabay

During the trade war, the time charter equivalent rates for panamaxes fell to $5,898 per day on 5 February 2019 but then rebounded to $19,878 per day on 3 September last year.

The rate then plunged to $5,392 per day on 18 May amid Covid-19 disruption but has found itself at $12,176 per day as of Friday, according to Baltic Exchange assessments.

US corn shipments have also done well this year, reaching nearly 40m tonnes over January to September, according to the US Department of Agriculture. That marks a 16% year-over-year increase, Braemar said.

"But new patterns which are emerging are set to boost exports further," the shipbroker noted.

The panamax rate for the US Gulf-China route rose to $39.79 per metric tonne on Friday from $29.99 per metric tonne on 18 May.

'Return to normal'

Braemar expects US grain export volumes to "return to normal" now that the trade dispute, begun in January 2018 by the Trump administration, has passed and China's pig population has recovered from the H1N1 swine flu.

These healthy conditions bode well for US exporters, and are likely to continue to support seaborne trade in the coming months," Braemar said.

The US Department of Agriculture projects soybean outgoing shipments over the 2020-2021 marketing year from September through August to spike 31% to 60m tonnes from a year ago.

November and December 2020 export volumes should come in 25% higher compared to the same two months of last year. Volumes for the first quarter of next year are expected to be 38% stronger than a year earlier, Braemar said.