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Larger Vessels are Trailing US Supramax Bulkers in Demand Pace
Larger Vessels are Trailing US Supramax Bulkers in Demand Pace

Larger Vessels are Trailing US Supramax Bulkers in Demand Pace

  • 23-Mar-2023 12:03 PM
  • Journalist: Timothy Greene

US: The Gulf Coast's restricted vessel supply and increased demand for grains are pushing up freight costs for Supramax boats domiciled in the US. At the start of the first quarter, the US Gulf Coast region experienced significant losses on both trans-Atlantic and fronthaul major routes due to the basin's pervasive poor fundamentals. Grain and petcoke spot freight rates were under downward pressure in January due to regional fleet imbalances and a weakening demand for shipments to the Far East during the Lunar New Year holiday.

Given the recent increase in Supramax rates, bulkers have evolved into a more adaptable mode of transportation for small loads like fertiliser and petroleum coke. This happens at a time when Capesize bulker rates are being pressured by a decline in demand for their main product, iron ore, as a result of last week's Brazilian landslip that cut off rail access to iron ore mines.

A change in Chinese demand for grain cargoes has resulted in a decline in Atlantic Panamax pricing. With the renewal of the Black Sea grain corridor agreement with Russia, Chinese demand has shifted back to Ukrainian goods.

Despite the region's high grain demand, Petroleum Coke demand on the US Gulf coast Supramax market is muted. Banchero Costa, a shipbroker, reported this.

One of the biggest consumers of petroleum coke, which is frequently used as a fuel in the manufacture of cement, is India. However, due to its lower cost compared to US Gulf Petroleum Coke, many cement producers in India are now switching to South African coal for their kilns. This pattern was especially pronounced in February of this year. There have been 15 more Supramax bulkers observed in the Southwest Pass at the entrance of the Mississippi River in recent months. Most of these ships are probably transporting grain shipments from Louisiana.

With only two Supramax bulkers loading Petroleum Coke at Port Arthur and three passing via the Houston ship channel this month, there has been a decline in the volume of bulk shipping through the Houston ship channel.

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