Supramax time charter equivalent rates for voyages across the Asia Pacific have hit brand new highs since these assessments were first launched in November 2019, Platts data showed, spurred by an increase in demand for the shipping of Indonesian coal to India.
A slew of thermal coal cargoes from Indonesia for loading during September helped tighten tonnage supply and has resulted in higher TCE rates, market participants said.
“I am not surprised. It should climb higher,” a shipping analyst said, adding that the expected healthy demand for grain cargoes in Q4 would lend further support to the Supramax segment.
Platts had assessed the TCE for a Supramax vessels opening in Singapore for a trip via South Kalimantan to west coast India with coal averaged at $9,303/d over September, 15.41% higher from the August average of $8,060/d.
India’s monthly coal imports improving
Market analysts tracking the movement of Indonesian coal have estimated that almost 50% of Indonesia’s September export volumes were destined for India.
Despite coal-fired power generation in India recovering to within a margin of the 2019 power generation since July, and even higher in September, thermal coal imports from India stood at 11.46 million mt in August, 13.34% lower on the year, but 6.84% higher month on month, according to data by coal trading house Iman Resources.
The September data has yet to be released, but overall market sentiment suggests that seaborne coal imports had been firm during the month.
According to data from India’s Central Electricity Authority, the stockpiles of thermal coal at power stations on Sept. 27, were sufficient for 19 days of coal burn, down two days from Aug. 31.
Trips to China elicit a premium
While China’s appetite for thermal coal is lower than that of 2019, cargoes heading to China have had to pay a premium on a TCE basis when compared with trips to India.
Shipowners have cited lower returns for trips out of China after their ships end their voyages on Chinese shores as a reason for charging a premium compared with a voyage to India to deliver coal, where they are able to command higher rates for hauling iron ore back to China.
Meanwhile, India’s east coast faced logistical challenges during most of September owing to the monsoon, which resulted in fewer iron ore cargoes. But market sources expect activity to return once the monsoon relents and on the back of firmer iron ore prices.
TCE for a Supramax vessel opening in South China for a trip via East Kalimantan to south China with coal averaged at $8,490/d over September, up 23.42% from the August average of $6,879/d, Platts data showed.