Panamax in Focus – Pacific Routes Gain as the Index Eases and China-Bound Thermal Coal Flows Weaken

Panamax earnings remain high, but the index slipped 41 points week-over-week to 2,407 on September 11th. The P5TC, dealing with thermal coal headed for China, saw its daily earnings drop $373 to $21,662. Despite this, overall earnings stayed strong, ranking in the 96th percentile of the past 52 weeks. Demand slowed, with tonne-mile demand falling 6.9% year-on-year and available tonnage up 2.1%, leading to a demand-to-supply ratio of 0.91, up from 0.94.

Pacific routes grew, while Atlantic routes fell. The South China/Indonesian route P5_82 increased $1,145 to $20,339 a day, and the Hong Kong-South Korea transpacific route P3A_82 rose $569 to $22,163 a day. In the Atlantic, P1A_82 tumbled $1,273 to $20,077 a day, and P2A_82 fell $690 to $30,703 a day. The Panamax ballast count was 812 on September 11th, with 222 vessels in Australasia and 182 in FEAST/NOPAC.

Thermal coal shipments to China declined 12.1% in July and 17.1% in August 2026, with Indonesian volumes dropping more sharply, 18.2% and 35.7%, respectively. Indonesia made up 55.2% of total thermal coal shipments to China during July-August, down from 65.2% in the same period of 2025. Coal demand is proving stronger than expected, with the IEA forecasting a 1.2% rise to a record 8.94 billion tonnes globally in 2026, with China’s consumption up 1% to about 5 billion tonnes.

Higher LNG prices have aided coal use in power generation, while higher oil prices have boosted coal use in China's chemical sector. El Niño may raise cooling demands and cut hydropower availability in some Asian markets, particularly India and Vietnam. China's latest figures, released September 15th, show raw coal production down 7.7% year-on-year in August, a smaller drop than in July, bringing the January-August decline to 3.3%.

Thermal power generation fell 4.3% in August, a sharper decline than in July, while hydropower rose 2.8%. Domestic coal supply is still below last year's levels, but power-generation figures don't yet indicate a sustained uptick in thermal demand. The IEA anticipates domestic mine output to recover later in the year and notes inventories at big ports and power plants as robust.

Its annual forecast still predicts China's seaborne thermal coal imports at 310 million tonnes, a 4.6% decline from 2025, due to inventory use and higher supplies from Mongolia. In the autumn and winter, higher heating demand could spur renewed seaborne buying if domestic supply and stocks can't keep up with the rise in consumption.

A seasonal uptick in China-bound thermal coal flows appears possible, though it's too early to say if it will return to year-on-year growth.