Freight rates for Asia-Pacific dry bulk Panamaxes could weaken further if bunker prices fall in line with the latest slump in crude futures.
4 January 2023
Bunker prices are likely to fall, as February Nymex WTI futures fell from the previous day by $3.33/bl to $76.93/bl and March Ice Brent fell by $3.81/bl to $82.10/bl on 3 January with renewed fears about the health of the global economy.
The price of very-low sulphur fuel oil with 0.5pc sulphur in Singapore and east China’s Zhoushan is expected to fall by about $30/t before Singapore’s market close on 4 January.
The IMF expects a third of the global economy to be in recession, IMF managing director Kristalina Georgieva said in an interview with US television network CBS on 1 January. The three big economies — the US, Europe and China — have been experiencing weakening economic activity. Economic downturns place pressure on oil prices, as demand for these commodities weakens.
Panamax dry bulk freight rates on the Indonesia-south China and east Australia-Japan routes are likely to fall by an additional 15¢/t and 25¢/t respectively, according to Argus projections, with lower bunker prices even if the market holds stable.
Panamax rates from Indonesia to south China fell by 30¢/t to $6.95/t on 3 January. This follows curbed thermal coal demand from China, following Covid-19 infections, together with the holiday season, and as restocking by utilities and industrial users has slowed significantly.
Rates for Panamaxes in southeast Asia were likely to be further pressured, as temperatures in many parts of China are forecast to rise in the following days, according to the China Meteorological Administration, further curbing coal demand from utilities for heating.
By Andrew Khaw
Photo credit and source: Argus Media
Published: 6 January, 2023
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‘Bunker barges operate in very local areas so these vessels call at port very often which means it will be a good fit for women with families,’ states Elpi Petraki, President of WISTA International.
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