Larger Capesize vessels attract small cargoes as freight costs turn out to be cheaper than Supramax

Strong points

Supramax, Panamax much higher time charter rates than larger capesize

Larger vessels are used to transport smaller packages when logistically possible

Charterers are increasingly securing larger vessels to move smaller packages as charter costs for smaller Supramax and Handysize vessels are proving more expensive than much larger Panamax and Capesize vessels, market sources said. shipping on March 31.

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“Ship surge is happening in all segments,” a ship operator said, adding that Panamax ships in the Pacific region are being repaired to carry smaller Supramax size cargoes due to the huge imbalance in the supply of Supramax ships, as many are currently stationed in the Atlantic basin.

The Cape T4 Index, a weighted average based on the trade flows of four key Capesize routes, averaged $11,435/d during the first quarter, $13,792/d lower than the APSI 5 – a weighted average of five key Supramax routes within Asia-Pacific – which averaged $25,227/d.

The Cape T4 was also $11,187/d lower than the KMAX 9, a weighted average of nine key Panamax routes, which averaged $22,622/d in the first quarter.

The APSI 5 and KMAX 9 indexes were above the Cape T4 on every valuation day during the first quarter, according to data from S&P Global Commodity Insights.

Capesize vessels typically carry around 180,000 tonnes, while Panamaxes and Supramaxes carry 75,000 and 55,000 tonnes respectively.


“We see Capesize ships routinely repair Panamax cargo where there is no size limit,” a source from the shipowner said.

Although freight savings are realized when cargo is moved onto larger vessels, these vessels load far less than their actual carrying capacity.

For the coal shipment, South Korean steelmaker POSCO reportedly accepted a Capesize vessel to transport an 80,000 tonne cargo (plus/minus 10%) from Newcastle on the east coast of Australia to Kwangyang in South Korea, April 11-25.

In the Atlantic Basin, German steelmaker Salzgitter is said to have repaired a Capesize ship to transport a cargo of coal of 75,000 tons (plus/minus 10%) from Mobile in the United States to Hansaport in Germany from April 10 to 20 at 30.10 $/ton.

A ship operating source following the Handysize to Ultramax segment noted that his company used its Supramax and Ultramax vessels to move a few cement shipments from Southeast Asia to Peru.

The source said it is very difficult to get Handysize bulk carriers to ship cement cargoes, which are considered to be dirty in nature.

At the same time, he added that Supramax and Ultramax vessels offer better freight economy despite slightly higher bunker consumption by these vessels and port charges, when including returns from a return trip to Asia. Southeast from South America.