Panamax Rates Remain Under Great Pressure

2012-09-18

Panamax rates remain under great pressure, primarily due to a tremendous oversupply of available vessels. Approximately 243 panamax vessels were delivered during the first seven months of this year. In comparison, approximately 274 panamax vessels were delivered during all of last year. For the end of this year, panamax deliveries are on pace to total approximately 415 vessels, which would be 52% more than were delivered last year.

The panamax market is seeing the largest amount of year-on-year fleet growth this year. A look at the rest of the dry bulk market shows that capesize deliveries are on pace to total approximately 280 vessels this year, which would be 9% more than were delivered last year. Handymax deliveries, which have also been relatively low, are on pace to total approximately 360 vessels, which would be 11% more than were delivered last year. Handysize deliveries have been very robust this this year. Handysize vessels are on pace to total approximately 365 vessels, which would be 26% more than were delivered last year.

To make matters even worse for the panamax market, global grain trade is also expected to decrease this year. This will put added pressure on panamax rates, as panamax vessels are often used to haul grain cargoes. Global grain trade for the current 2012/2013 marketing year is now expected to total only 287.64 million tons. This is 32.27mt (-11%) less the 319.91 million tons of grain than was exported during the 2011/2012 marketing year. Grain trade is coming under great pressure this year due to droughts in the United States and Russia.

Source from : CNSS Media Center

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