The Metal Ox is certain and very strong willed but is also blunt and direct in their views and is not afraid to say what it really thinks. The same goes for Splash Extra, as it goes for the captain of the now-scuttled and ashamed Wakashio.
As the latter recently played the infamous blame game, he sounded just like a spoiled brat desperately seeking access to his YouTube channel. It was the chief officer who did it, he cried out. The ship fatally grounded as the duo misguided it “to enter an area within the communication range of mobile phones” while knocking back liquor.
Attention on deck
From January 28 to February 18 2021, the Baltic Panamax Index average TCE soared by 51%. Accounting for one third each of the rise are the trades Singapore via Atlantic to Far East and the North-Pacific Round Voyage. Temporary speculation into the origin of this off-season bounce are multiple – few appear to be spot on as they share insights while a number are lost in the wilderness or are out-right manipulative remarks.
As always, Splash Extra is without fear and without favour as we seek to weed out the hot air.
At the centre of this spike is the rush of soybean cargoes out of New Orleans in the US. Outstanding sales of soybeans piled up during the fourth quarter of 2020, but the actual shipments only began to flow in January 2021. Spot freight rates for voyages heading to Qingdao, China went from $30 per tonne to $47 per tonne in just seven weeks. Extra buoyancy has been provided by the temporary reversal of containerisation for US west coast grains exports.
Nevertheless, Splash Extra does not recognise a large scale ‘out-of-(oceanic)-balance’ market. While open ships in the Gulf of Mexico did run low for a week in mid-February panamax tonnage availability in that area has been higher than last year for all other weeks in 2021.
But the patience of many operators in the market has paid off. Many ships have spent time repositioning themselves out of the Far East and into the Atlantic for the start of the South American grains’ exports season. In the Atlantic they have been welcomed in the south, but even more in the Mexican Gulf.
Meanwhile in the Far East, several ships have been engaged in the Chinese stop-start coal import policy. Indonesia, for one, has literally been in the middle of the battle between the Newcastle Bay Buccaneers and the Beijing City Chiefs.
Independent sources have shown Splash Extra that the Indonesia to China coal trade during January to June last year was stable at 11m a month. It then declined through July to September – only to be aiming for the moon afterwards. 4.2m of coal exports were recorded in September, 17.7m in December and 19.3m in January. While February has clearly cooled down this trade, many panamaxes have been busy business bees here for months.
As the law of the jungle reigns on the field, the impact of China – in any form – is welcomed by the operators and owners, as they tend to love market volatility. Even if it causes panamax rates soon to fall back.