Coal traders in the Indonesian thermal coal market have been facing issues fixing vessels this week due to a surge in bunker prices on the back of the US-Iran war, according to market sources.
Some vessel operators defaulted on charter parties and claimed that ships could not bunker in time or proceed to scheduled loading ports, said a Singapore-based trader.
A Chinese trading firm had difficulty getting any vessel fixtures this week and said that one vessel operator declined to quote because of a surge in bunker prices.
Several shipowners have stopped offering vessels in the market, other market participants also said. A few shipping firms that are offering vessels in the spot market are asking for premiums which forced buyers to hold back, said an Indonesian coal producer. Some of the producer's customers have also requested delaying loading dates by a few days.
"There is a complete risk-off behaviour happening now. Bunker is too volatile," said a market source at a major dry bulk shipping firm. The market needs to stabilise before people are willing to commit, he added. Vessel fixing has been quieter, and there has been a downtrend in available Panamax vessels on ballast to Indonesia to load coal, he said.
Rising freight rates have largely deterred coal market participants from trading activity this week. Argus assessed Panamax freight rates to transport coal from Indonesia to south China reached $11.90/t on 10 March, up from $8.65/t on 27 February before the onset of the US-Iran war.
