The dry bulk market picked up on Tuesday as the Americas stepped up to provide coal and grain exports that are not coming from Russia and Ukraine during the ongoing conflict. The panamax 5TC, a spot-rate average across five key routes, improved 4.8% to $27,367 per day, according to Baltic Exchange data. Navios Maritime Holdings’ 82,224-dwt kamsarmax Navios Southern Star (built 2013) was said to be fixed for a transatlantic trip from the US Gulf to Europe at $21,500 per day, the exchange said. That came as average rates for the roundtrip voyage on the same transatlantic trade picked up 5.5% on Tuesday to $22,880 per day.

The supramax 7TC also had a better day, rising 3.5% to $30,062 per day. “Rates in the Atlantic have remained firm despite the loss of coal from Ukraine and Russia, and brokers attribute the strong Atlantic rates to high cargo levels of coal from the US and grains from South America,” Clarksons Platou Securities wrote in a note.

Disruption of commodities from Russia and Ukraine has certainly benefitted tonne-mile demand as western European imports are being sourced from greater distances, Jefferies’s analyst Randy Giveans told TradeWinds. “Much of this trade in on mid-sized and small-sized vessels, further supporting rates for everything from kamsarmaxes to handysizes.” Ukraine exported 28.2 MMT of grain in 2021, according to Clarksons. Russia shipped off 145 MMT of coal in the same year. Capesize rates have also risen on the back of positive sentiment for the smaller asset classes and higher coal and iron ore trades, he said. But Fearnleys Securities noted that rising bunker prices can also boost both owners’ time-charter equivalent rates and day-rates. “For owners, fuel is largely averaged out over the financial quarters and largely seen as a pass-through cost over time,” the investment bank wrote. “However, fast changes to bunker prices (reflected in the freight rates) could benefit owners in the short run as bunkering is usually done every 2 to 3 trips for larger sizes.”

The higher focus on commodities amid the war also stands to benefit the dry bulk sector by improving sentiment as carriers look to secure capacity on longer voyages, Fearnleys added. “We are heading into another year with high volatility, the effect on grains and minor bulk and longer distances likely materializing later in the year when Black Sea crops are getting into season should war and sanctions continue.”