India: Bulk coal vessel freights exhibit mixed trends w-o-w
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Coal vessel freight rates have shown diverse trends this week. Demand from India's sponge iron producers are emerging as they gear up to build stockpiles ahead of the monsoon season, anticipating constraints in domestic production and transportation.
Additionally, the Indian government has extended the mandate for imported coal-based power plants to operate at full capacity until 15 October 2024, foreseeing high electricity demand during summer and heatwaves. As a result, this extension will lead to an increase in coal stocks at ports.
Route-wise details:
- Australia-India freight rates remained stable w-o-w: Freight rates from Australian ports stable w-o-w for India. As per BigMint's assessment, coal freight rates from Port Hay Point, Australia, to Paradip, India, were recorded at $19/tonne (t), stable w-o-w on 9 May. The stability in freight rates was attributed to optimistic expectations regarding the improvement in steel fundamentals for both the Chinese and Indian markets. Additionally, anticipated demand growth following India's general election contributed to premium July-loading cargo prices.
A source informed BigMint, "An enquiry got fixed this week. SAIL has booked a Panamax vessel of cargo capacity 75,000t from an Australian port to India at a freight rate of $20.10/t."
- South Africa to India freights decrease w-o-w: Freight rates for coal shipments from the Richards Bay Coal Terminal (RBCT) to Paradip, India, are currently at around $19.11/t, an decrease of $1.64/t w-o-w. South African thermal coal experienced a decline as concerns regarding geopolitical tensions in the Middle East diminished. Additionally, heightened stockpiles at RBCT coupled with subdued demand exerted further pressure on prices.
- Indonesia to India freights decrease w-o-w: Freight rates for coal shipments from East Kalimantan to Paradip stood at $14.5/t, down by $0.5/t w-o-w today. This decline can be attributed to the volatility in Indonesia's thermal coal prices, prompting buyers to adopt a wait-and-watch approach and reduce imports, as they have sufficient inventories. In addition, multiple cargos are witnessed to be seeking tonnages for May loading dates.
For the Indonesia to India route, two Panamax vessels have been booked at $16-16.5/t for 13-17 May and 18-24 May laycan, sources informed BigMint.