Capesize Misery Continues

A decline in demand for Capesize vessels has been countered by an improvement in demand for Panamax vessels, according to the latest Dry Bulk Insight, published by Drewry Maritime Research. This left the Drewry Hire Index unchanged from January’s level.

Panamax was the sole segment to record an improvement in earnings in February. Rates for vessels doing round voyages from Far East to East Australia more than doubled, rising from $3,954pd to $6,818.
Weather-led disruptions in transport have affected Australian coal exports and will continue to do so as the mines are still flooded. There was a 19% decline in coal exports from the four major ports of Queensland in January.

Colombian coal production was severely diminished throughout the month as indefinite strikes due to labour disputes at the country’s largest thermal coal exporter, Cerrejon, halted production. Colombia is losing almost 150,000 tonnes of output every day as a result of the strikes. Meanwhile, Columbia’s third largest exporter, Drummond, has been banned from exporting coal as it has violated environmental laws. All these problems have collectively led to a decline of 85% in Colombia’s daily coal output.

While Cerrejon and Drummond should recover quickly from the current situation, Columbia’s main railway operator might reduce its coal throughput, leading to slower export growth in the long term.

The Drewry Hire Index takes 18 different trade routes, covering all the sectors of dry bulk market. Each sector is weighted within its market to produce a time charter earning index. These are averaged into the overall Drewry Hire Index. January 2002 is designated as the point where all indices equal 100.