The spot market for panamax bulkers is still awaiting its seasonal upturn, as a general lack of industrial activity holds back recovery and sits on sentiment.
China is on holiday for its Golden Week celebration, which has halted some demand and chartering activity since last week.
Shipfix analyst Ulf Bergman said in a daily market report on Wednesday: “The absence of many Chinese buyers during the celebrations will weigh on trading and cargo order volumes during the coming week.”
But the issue goes deeper than that.
Researchers at shipbroking group Fearnleys said the countercyclical weakness comes even though growth in loading volumes is outpacing supply growth.
“The weakness is largely attributed to the absence of a cyclical recovery in industrial demand from the US and Europe, which has prevented any substantial uptick in rates,” it said in a market report on Wednesday.
“Earlier hopes for a recovery in [the third quarter] have now shifted to the beginning of 2025, further dampening sentiment.”
Allied Shipbroking’s research team said much of the “eye-catching” market weakness is partly down to a resumption of Panama Canal transits over the past few months.
“In each of August and September, the number of transits was just in excess of 200, and while this is still substantially below 2022 levels (the last ’normal’ year), it is more than three times the number of bulkers that passed through the canal in January,” the team said in a LinkedIn update.
Five days of falls
The Baltic Panamax Index declined for the fifth consecutive trading day on Wednesday.
The average panamax spot rate, weighted across five benchmark routes, was assessed $204 lower at $12,274 per day.
Seasonality usually propels spot rates upward during September and into October, but this year the trend seems to have turned countercyclical.
Average panamax spot rates averaged $12,765 per day in September.
This is some way below the average of $19,439 per day for the month over the past five years, although this calculation includes the figure for September 2021, when average rates were roughly double what might be expected.
Atlantic soft
Fearnleys does not expect things to get better quickly, as tonnage supply to the market grows and demand in the Indian Ocean and Pacific remains weak in the meantime.
“Activity in the North Atlantic has been limited, with rates softening as vessel availability increases,” the report said.
“Meanwhile, holidays in Asia have also contributed to the overall slowdown in trading, keeping the market under pressure.
“Even with some demand emerging from Australia, rates have continued to ease, and bearish sentiment remains the dominant theme.”
The Baltic Exchange’s forward curve for panamaxes indicates rates of $13,800 per day for October, rising to around $14,700 per day in the final two months of the year.
