Source: ICIS
The Panama Canal Authority (PCA) has announced an immediate increase in the maximum allowable draft for the Neopanamax locks, with another increase set for July 11. An extra booking slot will also be available starting August 5 during Booking Period 2.
Recent improvements in water levels at Gatun Lake, reaching 81.3 feet and expected to rise to 82.1 feet by mid-July, have allowed the PCA to ease previous transit restrictions imposed in July 2023 due to a prolonged drought. These changes gradually bring daily transits back to the typical 36-38 per day seen before the drought’s impact.
These improved conditions are expected to enhance transit times for vessels traveling between the US Gulf and Asia, as well as Europe and west coast Latin America countries. This is particularly beneficial for chemical markets moving products across regions, which have been affected by prior canal bottlenecks.
Implications are notable for US chemical markets; for example, Formosa Plastics USA recently resumed operations of its EG2 unit as transiting delays affecting mono ethylene glycol (MEG) exports ease. Improved canal conditions also affect US natural gas demand. Higher water levels can potentially reduce travel times for LNG shippers, encouraging increased output from LNG export plants, according to ICIS feedstocks analyst Barin Wise.
PCA reports indicate auction prices have stabilized following a congestion-driven surge in late 2023. Though currently near normal, auction prices remain a strategic option for customers needing to secure reservations. Auction outcomes are shaped by various factors including market dynamics, waiting times, and customer-specific needs.
For non-booked vessels, wait times for southbound transits have been steady at under two days. Shippers are advised to account for an additional two-day minimum for unscheduled vessel transits.
