Inventories at Indian power plants fell back to about 8 days’ worth of generation, and in the Northeast part of the country, stocks fell to 4 days’ worth. The fall in inventories occurred a mere month before the arrival of the monsoon.

Coal India output in April fell by 33% from the previous month coupled with insufficient coal train supply. Indian Railways have missed coal train supplies targets throughout the past year and have significantly hampered India power plants stock building.

Indian Power generators’ woes were further compounded by coal prices on international markets that are at or near all-time high in most places, while electricity grid price cap renders those foreign coal uneconomical.

In that context, the fall in Chinese demand for foreign coal represents some solace for Indian buyers, and even occasionally an opportunity, as some Chinese traders have been reported to resell Indonesian coal to Indian buyers.

Monaco’s C Transport Maritime (CTM) has revealed strong results for its supramax pool over the past six months. Returns from the revenue-sharing agreement (RSA) have averaged 14% above the sector’s benchmark index since last November.

The results were announced at the pool’s first physical meeting since 2019 following a gap enforced by the pandemic. The 15 RSA members controlling more than 50 vessels were hosted at Rome’s historic Palazzo Colonna by Italian shipowner d’Amico Group and shipping association Confitarma. D’Amico has four ships in the pool.

CTM, led by John Michael Radziwill, described the setting as appropriate for “a little renaissance of our own as we get back to business as usual. We were all very happy to get back together and share our opinions and views on the market. It’s been a challenging start to the year with some unexpected curve balls being thrown which impacted the market in their own way.”

The shipowner cited unpredictable supply shocks, the Indonesian ban on coal exports in January and the war between Russia and Ukraine. “Despite these significant hurdles, the supramax RSA still managed to outperform the benchmark index by over 7% during the January-April period,” it added.

“We could not have achieved these results without the trust of our members and the knowledge sharing that takes place inside the RSA. This we all benefit from, and our bi-annual supramax RSA meetings help to reinforce the value we place in open and honest communication with our members.”

Pool members are expecting the supramax market to be well supported in the coming months thanks to limited fleet growth. The group is also experiencing strong demand for minor bulk cargoes. “We will continue to work together as we seek to maximize returns and outperform the market,” CTM said.

The capesize market has been jolted out of a slump, with spot rates reaching a five-month high as the much-anticipated activity from Brazil increased. The average weighted time charter closed at $32,885 per day on the Baltic Exchange, up 46% from a week ago. Rates are 190% higher than a month ago. According to ship brokerage Fearnleys, rates saw gains in the east and in the west, with “greater expectations as well as actual activity out of Brazil being the main driver”. With Western Australian iron ore rates following, there was “still room for a further positive trend”, it said in a note this week. In an earlier note, the brokerage said that several fixtures for coal to India from Indonesia had been concluded on capes.

Capesizes, which are the most volatile of all dry bulk segments, have now quickly surpassed panamaxes, supramaxes and handysizes in terms of day rates.

Golden Ocean’s chief executive Ulrik Andersen said he has seen “an insatiable appetite for coal into India” from Indonesia and Australia which is driving up rates for both capesizes and panamaxes. In addition, Brazil’s mining giant Vale has re-entered the market.

China’s removal of coal tariffs is a signal for buyers to increase purchases, perhaps from Russia, which will add support, he said, adding that concerns about a potential slowdown in China leading to a drop in demand will not threaten the capesize story due to pent up demand elsewhere. “We are optimistic about the rest of the year, which is also reflected in the forward curve.”

Indeed, June and July were priced above spot levels, at $36,500, while the third quarter was at $37,500, according to figures from broker GFI as of May 11. That is slightly lower than the previous session. Congestion in China is also still a factor in the market, although with a slight decline. According to the Signal Ocean platform based in Greece, 126 capesizes were waiting in the second week of May versus 137 in the prior week. The number of ballasters was also decreasing, dropping by 10 vessels to 61, its data showed. That is 25% lower than the last peak in mid-March.

The war in Ukraine has wiped millions of tonnes of grain from the market, leaving big questions about how nations in Africa and elsewhere will cope. The turmoil has added to rising food prices and led to fears of widespread hunger. Around 1.7bn people, 20% of the world’s population, are at risk of hunger and poverty because of Russia’s war on Ukraine, according to United Nations secretary general Antonio Guterres. “We must do everything possible to avert a hurricane of hunger and a meltdown of the global food system,” he said in March.

Billions of lives around the world could be upended by the war’s effects on global food, energy and financial markets, a UN Conference on Trade & Development (Unctad) report warned. It forecast a worsening outlook for the world economy, underpinned by rising food, fuel and fertilizer prices, greater financial volatility, divestment of sustainable development, reconfigurations of global supply chains and growing trade costs. “This rapidly evolving situation is alarming for developing countries, and especially for African and least developed countries, some of which are particularly exposed to the war in Ukraine and its effect on trade costs, commodity prices and financial markets,” the report said. “The risk of civil unrest, food shortages and inflation-induced recessions cannot be discounted,” particularly due to the fragile state of the global economy and the developing world because of the pandemic.

Global growth is projected to slow from an estimated 6.1% in 2021 to 3.6% this year and next, according to the latest forecast by the IMF. This estimate includes the 0.8% that the fund cut from its previous estimate for 2022 following the outbreak of war. Preliminary analysis by the UN suggests that as many as 1.7bn people in 107 economies are exposed to at least one of three risks posed in food, energy, and financial markets by the war. Most of these people live in Africa, Asia and the Pacific, Latin America, and the Caribbean, according to the UN’s Global Crisis Response Group report last month. UN experts said exposure to just one of these risks is bad enough to cause debt distress, food shortages and blackouts, when combined with the impacts of Covid-19 and climate change.

North Africa and the Middle East largely rely on imports of cereals, as does much of Asia and sub-Saharan Africa. The EU is mainly self-sufficient for many agricultural products, but its farming sector is a net importer of specific products such as feed protein. When combined with more expensive fertilizer and energy, this could cause production problems for farmers in Europe and drive-up food prices. “Our first priority is to make sure that Ukrainians have enough food, fuel and water,” European agriculture commissioner Janusz Wojciechowski says. “We will also help them to continue planting and growing cereals and oilseeds, much needed for themselves and for the world, and facilitate their exports. When UN secretary general Antonio Guterres visited Kyiv, he and Ukrainian President Volodymyr Zelenskyy discussed the food crisis caused by the war. “Ukraine is literally giving bread to almost 400 million people on the planet,” Zelenskyy said. “And now the UN recognizes that rising food prices this year will cause famine for at least 47 million people in 81 countries.” As Odessa, Ukraine’s main Black Sea port for exporting agricultural products, was struck by missiles this month, Zelenskyy called for an end to the Russian blockade. “Without our agricultural exports, dozens of countries in different parts of the world are already on the brink of food shortages …” he said. “Politicians are already discussing the possible consequences of the price crisis and famine in Africa and Asia. We will do this while working towards making our food supply chains more sustainable and resilient to future crises.”

Russia and Ukraine provide around 30% of the wheat and barley consumed worldwide and 18% of the corn. Russia remains a significant producer of fertilizers used in crop production. Ukraine and Russia together accounted for 15% of global seaborne grain exports last year, according to Clarksons Research. This year had been expected to be a record-breaking one for Ukrainian grain and oilseed production. But the Ukrainian Grain Association (UGA) expects production to fall by 40% to about 63 MMT this year. Clarksons Research data shows that since the start of the invasion, Russian grain exports are down by around 25% compared with average levels during the 2020-2021 season. By late March this year, combined grain exports from Russia and Ukraine were running around 1.2 MMT per week below 2020-2021 average levels, a loss equivalent to around 20 panamax cargoes per week, according to Clarksons. Ukrainian farmers began sowing crops in 20 regions in April. The war is expected to cut its harvested area for grain, wheat, and corn by 26% and for barley by 20% in the coming season, according to UGA estimates. Europe is helping. The European Commission presented a raft of short- and medium-term actions in April to aid global food security and support EU farmers and consumers as food prices rise, as well as input costs for energy and fertilizers. Before this year’s harvest begins in Ukraine, typically in June or July, the challenge is to work out how to export about 26 MMT of grain that the country has in stocks, which is worth up to $7bn at current prices. But can Ukraine get these volumes to market? All its seaports are blocked. Its only functioning ports are river ports such as Ust-Dunaisk and Izmail on the Danube. This means, for now, all flows of Ukrainian trade are transshipped to ports in European countries. Before the war, around 90% of agricultural products from Ukraine were transported on water, principally by sea. But logistical constraints are proving a big headache. There simply is not enough throughput capacity at transloading terminals and border crossings, and there is a shortage of equipment. UGA figures show the bottlenecks in the system that are holding up progress. Inland grain silos have a loading capacity of around 715,000 tonnes per day, but rail capacity is only about 135,000 tonnes per day. This capacity gets squeezed further at border crossings into neighboring Romania, which can handle only 20,000 tonnes per day. Big grain-trading houses are trying to arrange delivery by rail to river transshipment ports, including Ust-Dunaisk and Izmail, for seaborne export from Black Sea ports such as Constanta in Romania.

The ILO estimates that 1,000 seafarers on board more than 100 trading vessels are trapped in Ukraine, including in the besieged city of Mariupol and the Sea of Azov. Some ships’ supplies of fresh water, fuel and stores are critically low. Threats to seafarers in the region are not limited to a shortage of supplies or shelling. Forty-seven crew members have been taken by force from at least two vessels in Mariupol by Russian forces, who styled the action as “an evacuation” in video shown in Russian news reports. Some have been taken to Russia and may be used in exchange for soldiers captured in Ukraine. The crews include nationals from Russia, Azerbaijan, Egypt, and Ukraine, according to Russian reports, which claim the vessels were unable to leave the war zone because of mines placed by Ukrainian nationalists. But the vessels had been undergoing Russian shelling for three weeks. The UGA hopes exports of grain will exceed 35 MMT in the 2022-2023 harvest season, down from 52.4 MMT in the previous 12 months. Ukrainian grain production reached an all-time high in the 2021-2022 season, peaking at 106.4 MMT. This is expected to fall to 62.9 MMT in the season ahead. The UGA thinks monthly throughput capacity will triple from current levels to around 2 MMT of grains within the next couple of months, down from 6 MMT per month before the war. The association hopes the country will be able to export 8 MMT of grains over the next four months before the new season begins. It estimates that 400,000 tonnes of grain per day can be loaded at Ust-Dunaisk and Izmail, but there is a shortage of barges, more of which will need to be sourced from Europe. Many Ukrainian barges are blocked in the besieged eastern cities of Mykolaiv and Kherson. Then there is the challenge of rail capacity. The government has issued a special decree that will cover any damage to foreign rail cars during the transport of grain from Ukraine, which it is hoped will embolden European rail operators to send their rolling stock. Policymakers are working to cut paperwork and get trade moving with initiatives such as extending the validity of documentation like veterinary certificates for salmonella. This will give more time for grains to reach export ports before their paperwork expires.

Ukraine’s attempts to restart its exports are made more crucial because of the lack of immediate substitutes for its grain and volumes from Russia. “Exports from the US, Australia and others were already running ‘flat-out’ at near-record levels in 2021, while in South America (notably Argentina), dry weather has trimmed yield projections,” Clarksons Research said in a note in April. “As such, our 2022 global seaborne grain trade projection has been cut by almost 40 MMT (around 7%) vs pre-conflict forecasts, with a 4% decline now projected globally this year.” The outlook for bulker demand is complex and fluid. Conventional trading patterns seem set to shift as buyers in the Middle East and Asia look to the US and Europe for additional volumes of grain that would otherwise have been sourced from the Black Sea. India too looks set to boost grain exports and take advantage of high commodity prices, following bumper wheat crops over the past couple of years, according to Clarksons. “Overall, with reshaping of trade patterns underway (albeit likely to take time) and given the shorter-than-average haul of Black Sea exports, a more moderate around 4% downgrade has been made in tonne-miles, with grain cargo vessel requirements projected to be fairly steady year on year,” it said. Clarksons thinks the better-than-expected crop yields in Ukraine and its large inventories are “positive indicators”, but says the situation remains fluid, especially as combat in central and eastern Ukraine will continue to be disruptive. The firm also notes that exporting Ukrainian grain via alternative ports such as Constanta or by land into Europe has “yet to yield significant results”. But there is hope. At the end of April, the panamax bulker Unity N departed from Constanta, loaded with 71,000 tonnes of Ukrainian corn bound for Spain. Further cargoes are reportedly planned for this month.

Coal is the dirty habit that developed economies are trying to kick — but Russian coal is in as much demand as ever. Electricity demand globally has surged after pandemic restrictions were scaled back and industries returned to work, leaving power companies scrambling for a cheap energy source: coal. The world generated more electricity from coal than ever last year, up by 9% from the previous year, according to the International Energy Agency. The Ukraine war has added fuel to red-hot coal markets. But data shows that although many companies, including some shipowners, have declared they will not do business with Russia, its coal exports have been doing just fine during the first two months after the invasion. And much of that coal has made its way to Europe.

Loading data from bulker tracking platform Oceanbolt shows that 30 MMT of Russian coal of all types was loaded on to vessels between 24 February and 24 April, compared with 33.8 MMT in the same period last year. Of this, the biggest amount by country, 6.2 MMT, is bound for China. A further 3.6 MMT is headed for South Korea. But just over 30% of the coal exported from Russia in this period has made its way to European countries, including member states of the European Union, which has imposed trade sanctions on Russian entities and individuals. Some 8.4 MMT was destined for Europe in the two months since the war began, the same as during the corresponding period last year, Oceanbolt data shows. The Netherlands accounted for 2.8 MMT of this, which is 200,000 tonnes more than made its way to Dutch ports during the same two-month period last year. Much of this volume is likely to be for transshipment from Rotterdam to other destinations.

Much has been made of the possibility of cheap Russian coal going to India, but it imported less of the commodity during the two-month period than it did last year. Sanctions have so far hampered how Indian importers of Russian coal pay for shipments, following a trade deal signed by the countries last year. India’s steelmakers are dependent on imports of coking coal, which total between 50 and 55 MMT each year. Officials have been negotiating shipments of Russian coking coal to India to kick-start the trade, Reuters reported on 26 April. The key, as always, is price. Prices for coking coal from Australia, India’s top supplier, have rocketed from $200 to a peak of $700 per tonne this year, according to Reuters. The situation will change in August, when new EU sanctions come into effect, banning purchases of Russian coal. Russian ships will also be barred from entering EU ports. The US has already banned imports of oil, gas, and coal from Russia.

Thoresen Shipping continued to make healthy profits in the first quarter despite a significant easing of freight rates during the low season. The Thai-backed supramax bulker specialist reported a net profit of THB 1.3bn ($37.3m) for the first three months of 2022 in figures released Wednesday. This was down 23% on the THB 1.6bn seen in the preceding three months, but a more than six-fold increase on the THB 205bn seen in the corresponding period last year. Revenue for the quarter was THB 1.4bn, down 25% on the fourth quarter of 2021 but more than three times the revenue seen 12 months earlier.

Supramax freight rates averaged $25,156 per day in the first quarter, a 51% year-on-year increase, but 17% weaker quarter-on-quarter, Thoresen said. The shipowner said the recent steep spike in bunker prices had put pressure on earnings during the quarter, but this had been compensated by the gain from bunker swap agreements.

Meanwhile, vessel operating expenses remained low at $4,048 per day, which Thoresen said was 11% lower than industry operating expenses of $4,553 per day.

The Baltic Supramax Index (BSI) averaged 2,287 points in the first quarter of 2022, a significant increase from the average of 1,512 points seen 12 months ago, but down from 2,771 points in the fourth quarter of 2021 mainly due to the Lunar New Year celebration, according to Clarksons. However, the index rebounded in mid-February as minor bulk demand remained firm, while ongoing port congestion continued to disrupt the supply of tonnage. Clarksons says the minor bulk trades are less exposed to the effects of the Russia-Ukraine conflict due to the diversity of trade in both commodities and major trading countries.

At the end of the first quarter, Thoresen’s owned fleet stood at 24 vessels made up of 22 supramaxes and two ultramaxes with an average size of 55,913 dwt and an average age of 14 years. “Despite the low season in the first quarter, we managed to deliver a strong net profit,” said Chalermchai Mahagitsiri, president, and chief executive of parent company Thoresen Thai Agencies. “With the high time charter equivalent rate and consistently low vessel operating expenses, the shipping segment’s performance remained robust. The outlook for the full-year 2022 seems moderately balanced, Clarksons forecasts dry bulk trade growth of 1.6% in ton-miles … while fleet expansion is projected at 2.2% in deadweight ton terms.”

Hong Kong’s Pacific Basin Shipping is stepping up its decarbonization efforts in cooperation with Japan’s Nihon Shipyard and trader Mitsui & Co. The shipowner said the partners will investigate the development of zero-emission vessels and investment in future fuels-related bunkering infrastructure.

Nihon Shipyard, a partnership between Japan’s two largest shipbuilders, Imabari Shipbuilding and Japan Marine United, is focusing on the design and construction of eco-friendly ships for a zero-emission future, Pacific Basin added. Mitsui’s extensive experience and scale, on the other hand, will be used to look at options for bunkering new zero-carbon fuels. The trader will also seek “mutual benefits in the ordering of zero-emission vessels”.

Pacific Basin chief executive Martin Fruergaard said the partnership is exciting. “Through this agreement, Pacific Basin will continue to be at the forefront of development within the industry, as we accelerate the transition and make zero-emission-ready vessels the default choice by 2030 and enable us to meet our target of zero emissions by 2050,” he added.

Mitsui said that energy solutions are a strategic focus area for the company. They comprise a new growth opportunity that will contribute to decarbonization, the trader added.

Pacific Basin has just enjoyed its best-ever year in strong bulker markets. The huge 2021 net profit of $844.8m was the best in its 34-year history. The figure was boosted by the reversal of a $152m vessel impairment taken in 2020. This decision was taken “in light of the significantly improved dry bulk market and the increase in ship values”, the company said.

Germany’s Hapag-Lloyd expects strong earnings to roll into the second quarter but warns that the freight market may have peaked. The world’s fifth-largest liner company had an extraordinarily strong start to the year with profits surging 220% on the back of higher freight rates. Group profit rose to $4.7bn in the first three months of 2022, up from $1.45bn in the same period last year. The surge resulted from ongoing disruption in supply chains sucked capacity out of the market. Revenues were 80% higher at close to $9bn, up from $4.9bn in the previous period. That was due to higher average freight rates of $2,774 per teu — up from $1,509 in the previous year — as well as a stronger US dollar. “The year has got off to an exceptionally strong start on the whole,” said chief executive Rolf Habben Jansen. “And whilst there have been first signs that the market has passed its peak, we also expect a strong second quarter.”

Based on the better than anticipated earnings, the company expects the second quarter will exceed earlier expectations. Transport volumes for the company’s 248 ships were roughly on a par with the prior-year level, at 3m teu. However, ongoing port congestion resulted in longer round voyage times for ships and containers, which had a negative impact on transport capacity, the company noted. Hinterland infrastructures are also under strain, resulting in longer turnaround times for ships and containers. “Global supply chains continue to be under significant pressure — not least because of the recent measures taken in China in response to Covid-19 outbreaks, Habben Jansen said. “This situation is expected to improve in the second half of the year. For our customers worldwide, we will do everything in our power to help normalize this difficult market environment as quickly as possible,”

The result was impacted by higher costs. These included significantly increasing expenses for container handling and a roughly 60% higher average bunker consumption price. But the better-than-expected results mean the company can stick with its massively upgraded profit forecast for 2022. Ebitda in the first quarter rose to $5.3bn for the three months, up from $1.9bn. Ebit climbed to $4.7bn up from $1.5bn. On 28 April, Hapag-Lloyd said it expects to deliver Ebitda in the region of $14.5bn to $16.5bn this year, some $2.5bn higher than earlier forecast. Ebit for the year is forecast at between $12.5 to $14.5bn on the back of soaring freight rates. “However, this forecast remains subject to considerable uncertainty given the ongoing Covid-19 pandemic and the war in Ukraine,” the company said.

Hapag-Lloyd’s decision to project an earnings forecast contrasts with its THE Alliance partner Ocean Network Express (ONE). The Japanese line deemed it “extremely difficult” to announce a reasonable business forecast for the coming financial year.

Belships had its strongest start to the year ever during the first three months of 2022 and has declared its biggest ever dividend to shareholders. The supramax and ultramax owner will distribute NOK 2.25 per share to investors, comprising an extraordinary payment of NOK 1.25 per share on top of its ordinary quarterly dividend. The distribution, which totals NOK 569.6m, is based on Belships’ record-high net profit for the 2021 financial year.

Belships has meanwhile declared an option to purchase the 63,600-dwt ultramax bulk carrier Belnippon (2018) from Shoei Kisen of Japan. The strike price was not disclosed but Belships described it as “significantly below current market levels”. Online data platform VesselsValue estimates the Belnippon’s current market value at $36.5m.

For the first quarter of 2022, Belships booked net profit of $59.5m, up from $16.5m during the same period last year. The Norwegian firm said the result was mainly caused by the improved freight market and its larger fleet, compared to a year ago. Belships’ commercial platform Lighthouse Navigation continued to deliver strong results. It generated $22.6m of Belships’ $60.5m Ebitda during the first quarter on the back of the company’s expansion plus increased margins from freight trading. A year ago, Lighthouse contributed $3.5m to Belships’ Ebitda during the first three months.

The first-quarter results were powered by a year-on-year increase in earnings for Belships’ growing fleet of bulk carriers, which had 20% more vessel days compared to in 2021. Net freight revenue for Belships’ owned vessels was $54.3m in the first three months of this year, up from $23.2m during the period in 2021. Its owned vessels earned an average time-charter equivalent (TCE) rate of $25,466 per day during the three months, around double the $12,802 per day earned in the same quarter of 2021.

Looking ahead, Belships has covered around 90% of its ship days this quarter at a gross daily rate of around $24,700 on average. Over the next four quarters, it has around 70% of its ship days booked at about $24,000 gross per day.

In late April, Belships agreed to acquire two more Japan-built ultramax bulkers with time-charters attached and fixed two other vessels on period charters.

The ongoing conflict between Russia and Ukraine is boosting the dry bulk market to levels not seen in almost half a year, according to market watchers. The BDI exceeded 3,000 points for the first time in five months on Wednesday, backed by higher average spot rates across dry bulk shipping. The index, essentially a market barometer, reached 3,052 points on Wednesday after picking up 113 ticks to surpass this threshold for the first time in five months. The last time that happened was on 13 December when the BDI registered 3,216 points.

This milestone received support from the broader dry bulk market, which saw average spot rates improve across the board on Wednesday. “The trade disruptions and route reconfiguration due to the war in Ukraine are the main reason for the strength in dry bulk,” said John Kartsonas, founder of dry bulk ETF-trading platform Breakwave Advisors. “Coal and grains are sought after from farther away, and that creates a lot of inefficiencies in trade, which for shipping means higher prices. On top of that, capesizes tend to strengthen seasonally this time of the year, as Brazil ships more iron ore, so the combination of the two means higher rates.”

He told TradeWinds that China’s weaker demand for iron ore “is something to keep in mind” as a threat to improving capesize spot rates, but that demand is not driving the market. “For now, the strength in dry bulk is not China-related,” he said. “It is supply-driven, meaning less available ships due to longer and lengthier trips.”

Capesize rates shot up, continuing an eight-day rally during which their average figure almost doubled. The Baltic Exchange’s capesize 5TC, which averages spot rates across five key routes, leapt 8.5% on Wednesday to $31,151 per day. The figure for the capesize backhaul route from China to Europe jumped the most, rising 22.3% to $25,525 per day.

Trader Mercuria has hired an unnamed capesize on Wednesday from Swiss trader Vitol to ship 170,000 tonnes of iron ore at $35 per tonne from Tubarao, Brazilm to Qingdao, China. Loading is set for 20 to June 30. That was above the price that Louis Dreyfus Commodities paid to fix unnamed capesize owned by Classic Maritime on Thursday from Classic to ship 170,000 tonnes of ore on the same route at $32.25 per day. The average spot rate for the transpacific roundtrip voyage between Australia and China also took a nice hop, gaining 9.8% to achieve $35,417 per day.

Panamax spot rates maintained an upward trend on Wednesday that began on 26 April as the panamax 5TC improved $357 per day to reach $29,848 per day. Levels in the North Atlantic improved with talk of more enquiry for both inter-Atlantic and front haul business,” Baltic Exchange analysts wrote on Wednesday in their daily take on dry bulk shipping. “Asia sentiment was said to have remained positive in general, with enquiry from both Australia and the US West Coast remaining strong.”

The supramax 10TC picked up $135 per day to hit $30,345 per day, while the handysize 7TC edged up $77 per day to $29,969 per day.