Dry bulk shipowners are increasingly reluctant to fix shipments to India given the rampant spread of Covid-19 cases in the country.
The spread of the virus in the country has also made most dry bulk shipowners less keen to offer vessels on a voyage charter ($/t) basis for voyages to India.
The cost of shipments to India has diverged voyage and time charter rates. This was reflected in a $4.75/t increase in the rate for a 75,000t shipment from east Australia to the east coast of India on Wednesday, and a $1.75/t increase in the rate for 75,000t shipments from Indonesia to east coast of India. These rates equated to around $35,000/day on a time charter equivalent basis, whereas market participants indicated time charters for trips to India would be between $28,000-30,000/day.
The widening spread between voyage and time charter rates follows charter party differences, where bookings on a voyage basis would mean that shipowners would not be compensated for potential port delays or closures relating to strikes or force majeures that could leave vessels stranded for some time. For owners considering shipments towards India, many favoured booking trips to India on a time charter basis ($/day), which would still provide compensation in the event of delays.
But the premium for $/t rates may converge as shipowners may also be concerned about possible future restrictions against their vessels if they call at Indian ports, in addition to concerns about delays and infections for the crew. Some market participants have indicated that some shipowners were more reluctant to fix on $/day trips to India, with owners asking for a similar premium of $5,000-10,000/day above market rates. South Africa's Richards Bay port has issued a list of special measures for ships arriving from India, particularly relating to crew change and shore leave for crew members. But so far it stopped short of implementing a 15-day quarantine period for ships to wait at anchor after arriving from India, a move expected by some market participants after reports early in the day. This followed recent announcements from ports including Fujairah and Singapore banning crew change for seafarers that have recently travelled to India.
Covid-related deaths in India have risen by a record 3,780 over the past 24 hours, and daily infections rose by 382,315 on Wednesday, health ministry data showed, with the number of infections in excess of 300,000 every day for the past two weeks.
India is a major coal importer and has become an increasingly key customer for east Australian volumes in recent months, as a result of China's ban on Australian coal imports.
Coal output from state-controlled producer Coal India nearly halved in April from March. But this may not significantly boost receipts of seaborne thermal coal as the spike in Covid-19 cases and the uncertain outlook for industrial operations weigh on appetite for pre-monsoon cargoes.
