SK Gas has paid a record $5.3m to secure an expedited transit slot through the Panama Canal, as drought restrictions and surging demand intensify congestion at the waterway, according to Splash247. Bloomberg reported that the South Korean company made the winning bid at an auction this week to send the LPG carrier G. Spirit northbound through the canal on September 1, breaking the previous record of $4.6m set earlier this month.
Record Auction Bid
The sums illustrate how rapidly the value of guaranteed canal access has escalated. Before the Iran war erupted, the median auction price was around $55,000, according to the Panama Canal Authority. Vessels arriving without reservations now face waits of as much as 11 days. The record bid reflects the premium shippers are willing to pay to keep vessels on schedule as transit slots shrink.
Congestion and Capacity Cuts
Panama is preparing to squeeze capacity further. As Splash247 reported last week, daily booking capacity will fall from 34 ships to 32 from mid-September as inadequate rainfall forces the canal to conserve freshwater. From September 3, nine neopanamax and 25 panamax slots will be available, with panamax availability falling to 23 from September 15. The canal has also been adjusting allowable drafts, although some planned reductions have recently been postponed as officials respond to rapidly changing water levels.
| Metric | Value |
|---|---|
| New auction record | $5.3m |
| Previous record | $4.6m |
| Median auction price before Iran war | ~$55,000 |
| Unreserved vessel wait | up to 11 days |
| Daily booking capacity from mid-September | 32 ships (down from 34) |
| Panamax slots from Sept 3 | 25 |
| Panamax slots from Sept 15 | 23 |
| Neopanamax slots from Sept 3 | 9 |
Tanker and Bulker Disruption
Broker BRS warned that tighter booking limits could increase congestion and push more tanker tonnage toward alternative, longer routes if water conditions continue to deteriorate:
Tighter booking limits could increase congestion and push more tanker tonnage toward alternative, longer routes if water conditions continue to deteriorate.
— BRS tanker report
Dry bulk could also benefit from the disruption. MB Shipbrokers said tighter transit availability and draft restrictions could encourage bulkers to route around Africa or Cape Horn, lengthening voyages and supporting tonne-mile demand. The effect could become more pronounced with a strong US grain harvest and the prospect of increased American grain exports to China following recent trade deals.
El Niño State of Emergency
Panama's government added to the sense of urgency on Tuesday by declaring a nationwide state of emergency over El Niño. Authorities said rainfall deficits on the Pacific side have reached as much as 60%, while 11 watersheds are already suffering water stress. El Niño is currently classified locally as very strong and is expected to continue well into 2027.
Watch List
- Water levels and rainfall on the Pacific side, with deficits already at 60%
- Further adjustments to daily booking slots or allowable drafts
- El Niño duration, currently expected well into 2027
- US grain export volumes to China, which could push more bulkers onto longer routes
- Auction prices for future expedited transit slots
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