The Atlantic Supramax market is feeling the sting of scarce petcoke inquiry from India, adding to mounting pressure from tonnage accumulating in the region.
The Houston to Krishnapatnam, east coast India, petcoke route, basis 50,000 mt slid 25 cents on Thursday to $27.75/mt. According to shipping sources, while there was an uptick of interest for petcoke from India for the second half of February and early March, it has not materialized as firm spot cargoes yet.
“There is no urgency to buy [petcoke],” a south India-based trader said, adding that buyers had preferred to hold off purchases as prices were expected to drop further, while a West India-based end-user said that the market is extremely sluggish with very limited demand, and that most of the big cement companies are covered. He added: “Sales are down. The market has taken a hit due to demonetization. The first quarter of the year used to be one of our best quarters. Now it’s our worst.”
With petcoke out of the game for now, the next few weeks may prove to be fairly challenging as the market finds itself in an uncomfortable position, with slowing grain traffic from the US Gulf Coast and East Coast South America’s soybean exports not yet at full speed. At the same time, Turkey is not rushing to stockpile scrap.
As a result, unemployed tonnage is gradually accumulating in the Atlantic, which may hinder a recovery in freight rates even if both grains and minerals demand rises come March.