Panamax Congestion in China: Two Forces Converge at Berth – Drewry | 15/07/26

Congestion of laden Panamax vessels waiting to berth at Chinese ports has increased in recent weeks due to two simultaneous factors: reduced domestic coal production in Shanxi Province and weather-related disruptions affecting port operations. Following a mine explosion in late May that killed at least 82 people, Chinese authorities launched extensive safety inspections, leading to the suspension of 148 coal mines. By mid-June, 97 mines had resumed operations, while 51 remained closed, and those that reopened were operating 20–30% below previous production levels. As a result, China significantly increased seaborne coal imports during June to offset weaker domestic supply and meet higher electricity demand, with coal accounting for more than half of the cargo carried by laden Panamax vessels waiting to discharge. At the same time, heavy rainfall and the passage of Typhoons Maysak and later Bavi slowed discharge operations, causing coal terminals in southern China—including Futian, Guangzhou, Xiamen, and Zhuhai—to reach near-full or full storage capacity. Although Panamax fleet deliveries are projected to reach a record 15 million deadweight tonnes (mdwt) in 2026, compared with 11–12 mdwt the previous year, port congestion is effectively absorbing much of this additional capacity, as vessels waiting at anchor are unavailable for new trading activity. Looking ahead, the report notes that congestion could ease if coal stockpiles decline and discharge operations recover following Typhoon Bavi. However, continued uncertainty in the Strait of Hormuz, combined with potentially stronger coal demand in Korea, Japan, and the European Union, as well as the expected impact of El Niño on hydropower generation and electricity consumption in China, could continue to support the global coal trade and sustain demand for Panamax vessels. Drewry concludes that the Panamax market remains caught between two opposing forces: a theoretical oversupply of vessels and an effective supply squeeze caused by port congestion, with congestion currently having the stronger influence. Link to Article