India: Bulk coal vessel freight rates remain supported on seasonal factors

• Limited inquiries floated as buying slows downs
  
  
• Supply of cargoes exceeds demand
  
  

Coal vessel freight rates have remained largely stable this week. There is sluggish demand of coal in the domestic market as buying activities have slowed down. This shows a market sentiment where there is an excess supply of cargoes compared to demand. Despite disruptions in the supply of South African coal, demand from the sponge iron sector has not increased significantly.

On the other hand," owners are charging a premium for delivering charters to India during the monsoon season. This is likely due to increased risks and operational challenges posed by weather conditions. After delivering their cargoes in India, owners may find it challenging to secure the next charter within Indian coastal waters. This difficulty could be due to seasonal factors, market conditions, or specific operational constraints."

Coal stocks across 21 Indian ports inched down as of 16 July 2024, according to BigMint data. During week 28 of calendar year 2024 (CY'24), thermal coal stocks at Indian ports stood at 15.24 million tonnes (mnt) compared to 15.30 mnt in week 27.

Route specifications:

• Australia-India freight rates stable w-o-w: Freight rates from Australia recovered this week as inquiries were fixed for mid August shipment. As per BigMint's assessment, freight rates from Port Hay Point to Paradip were recorded at $16.7/dry metric tonne (dmt), stable w-o-w. Meanwhile, a few inquiries are still in the market, probably fixed for the near term. As per sources, the inquiries are for end July and for August shipment.
  
  
• South Africa-India freights remain supported w-o-w: Freight rates from the Richards Bay Coal Terminal (RBCT) to Paradip are currently at around $16.4/dmt, stable w-o-w. Subdued long steel demand and falling bids amidst price pressure from sponge players have weighed on the bids for South African portside coal prices. Additionally, a few traders are seen offering material on the lower side amidst panicky market participants and weakening steel market sentiments.
  
  
• Indonesia-India freights increase w-o-w: Freight rates for coal shipments from East Kalimantan to Paradip stood at $14.05/dmt, up by $0.9/t w-o-w. BigMint noted, very less cargo out of Indonesia, resulted in the absence of inquiries for the Indonesia-India route.