China’s decision to restore soybean import licences for three US firms starting 10 November is seen as another step of gradually return to ‘pre tariff’ conditions. Beijing has resumed modest purchases of US soybean and wheat following last month’s meeting between the two countries’ leaders, though markets continue to wait for major soybean deals, after the White House trumpeted China would purchase 12mln mt by year-end. Yet, state trader COFCO’s oilseed unit announced on Monday that it had signed agreements to purchase over $10 bn worth of Brazilian agricultural products, without any mention of US volumes.
An interesting development since October’s US-China ‘soybean trade deal’, is that no Panamaxes carrying US soybeans have transited the Panama Canal. Instead, Panamaxes have opted for the Cape of Good Hope (CoGH) route, even though dry bulk transits through the Panama Canal have rebounded from 2024’s drought lows. According to AXSMarine data, Panamax cargoes totalled 9mln mt (split across 148 voyages) so far in 2025. Excluding drought-affected 2024, the Canal still has two months to match 2023’s 12mln mt (189 voyages). Yet, soybean transits have been scarce, only five this year, compared with 143 and 52 in 2022 and 2023 respectively.
The P7 average rate for October stood 6% higher y-o-y, following Atlantic tonnage exodus in September ahead of October 14’s supposed USTR fee dateline. As of 12 November, P7 sits around $54/tonne, with operators still preferring the longer Cape route despite higher freight costs, thereby supporting route earnings. A laden Panamax from the US Gulf to Qingdao takes roughly 40 days via Panama compared with 61 days via the Cape, an increase of about 5,000 nautical miles or 42%. With Singapore VLSFO at 4$69.50/tonne, 24% lower y-o-y, the detour burns around 600 tonnes more VLSFO and 40 tonnes LSMGO through ECA zones, adding roughly $300,000 in bunker cost and 20 extra sailing days. Using the P6_82 (Singapore round voyage via Atlantic) as a proxy, the lost time equates to another $300,000 in opportunity costs, bringing total incremental cost close to $600,000.
Even so, the overall economics remain comparable to or slightly better than a Panama transit. Current Panama Canal Authority fees are about $490,000, rising above $600,000 once port movements and bid-based reservation fees are included. Congestion risks and draft restrictions further reduce cargo intake, making the longer route operationally preferable. Looking ahead, Panamaxes scheduled for fourth and first quarter loadings look likely to continue avoiding the Canal, particularly as US LPG and LNG exports to the Far East peak, tightening slot availability. In contrast, transits for other dry bulk commodities remain firm due to limited routing alternatives. US coal exports to Central and West Coast South America, US PNW wheat shipments across the Atlantic, and US Gulf imports of Peruvian Phosphate fertilisers continue to rely heavily on the Canal.
US Gulf to Qingdao via the Cape is roughly 4,000 nautical miles longer than the Santos to Qingdao route, extending sailing time by about 16 days. With US soybeans again competing with South American supply, ton-mile demand has lengthened, providing some underlying support to freight markets. However, upside from this ‘potential displacement’ effect of US soy over South American beans could be limited. Private Chinese crushers continue to avoid US beans as they face a 13% tariff compared with only 3% for Brazilian and Argentine cargoes, reducing the competitiveness of US beans. Furthermore, the 12mln mt that China reportedly pledged to purchase into 2026 faces difficulty, with Chinese customs data already showing record soybean imports, with January–October reaching a record of 90mln mt. Vast stockpiles at ports sits at 10.3mln mt, 41% higher y-o-y and 312% higher than April lows. This coupled with negative crush margins would likely limit private commercial buyers’ near-term appetite for purchases for more expensive US-origin beans. The case is different for state buyers, whose inventory stockpiling capability should not be underestimated. China’s insatiable appetite and ability to continue absorbing oil molecules for strategic crude reserves continues to baffle markets. State-owned companies can easily proceed with previously pledged purchase volumes and even beyond, as a gesture of political goodwill toward the US, despite prevailing uncommercial circumstances.
6 months ago, P5TC and S10TC 1Q26 FFA contracts were priced at $10,044/day and $8,854/day respectively. Fast forward to date, this has been revised to $14,524/day (+44.6%) and $12,414/day (+40.2%), with bulk of the gains accrued over the past week. In valuation terms, mid-size bulkers have seen selective support amid a broader September to October rally across all segments, gaining about $1 million since the start of 2025 but still about $1 million lower y-o-y. Meanwhile, the Panamax orderbook, covering 68,000 to 100,000 Dwt units, stands at 35.5 million dwt or 7.6% of the active fleet, new deliveries add global fleet far outpacing pace of scrapping.
Markets are also eagerly awaiting the US Department of Agriculture’s 14 November WASDE report for more accurate reading on fundamentals, after the re-opening of the US government. So far, despite stalling US soybean exports to China, P7 has held up with longer CoGH routing.
Prior to the USTR’s pause, market sentiment had been clouded by concerns over impending US port fees, prompting an exodus of Panamaxes from the Atlantic basin. The Atlantic-to-Pacific ballaster ratio fell to a multi-year seasonal low of 0.5 in September, ahead of the planned 14 October fee implementation date, a reversal from 2024’s counter-cyclical pattern when the ratio averaged around 0.7, or 40% higher y-o-y. Yet in a swift turn of events, the newly proposed port fees were as quickly forgotten as they were introduced, with both Washington and Beijing announcing a suspension following high-level bilateral talks. The Atlantic-to-Pacific ratio climbed a wall of geopolitical anxiety as vessels ballasted westward in anticipation of a US grain export bonanza, only to tumble down a flight of stairs in November as soybean export velocity faltered.
A further outflow of tonnage from the Atlantic could eventually help rebalance rates between the two basins in favour of the Atlantic. However, unless cargo volumes pick up soon, especially as South American exports seasonally taper or Chinese demand slow, modest tonnage rebalancing alone may prove insufficient to sustain the recent rate momentum. Sustained upside for Panamaxes will hinge on supply and demand for the commodity itself and consistent cargo execution, rather than one-sided headline trade proclamations, made with panache but little follow-through.