Freight rates from the US Gulf to Asia edged down but held near a four-month high on Tuesday as prospects of rising demand towards the year-end kept ship owners keen to raise offers, brokers said.
Spot voyage fixtures for modern panamax rates for the benchmark US Gulf to Japan route were little changed from a week earlier at around $49-$50, though off highs around $52-$53 set early last week.
Ship owners, however, were eager to raise offers as users are seen to be more eager about booking vessels for November and December.
One Tokyo broker said panamax rates for the benchmark route for December shipment were discussed around $50-$52.
"Panamax rates have been drifting down since late last week, but there is no distinct reason," a Tokyo broker said.
Traders said the market could be in a slight corrective phase after rising consistently from this year's low of $30-$35 hit in late July to early August.
"We expect dry bulk freight rates will be softer this week as they rose too much," said a trader with a major shipping firm in Seoul. "It is like a technical adjustment."
Panamax rates have so far been supported by a firmer tone in capsize rates on tight vessel supply in the Atlantic market. Capesize vessels, which usually carry cargoes of more than 100,000 tonnes, are mainly used to carry iron ore and coal.
But an increase in panamax vessel supply and a shift by grain chatterers to cheaper handymax vessels were expected to put pressure on overall panamax rates, the Seoul trader said.
Panamax vessels carry 55,000-80,000 tonnes of freight, usually grain, and handymax carry 22,000-40,000 tonnes.
Most market players were currently watching vessel inquiries for iron ore from China for direction, the trader in Seoul said.
To meet its voracious demand, China has been using capsize vessels to ship iron ore from Brazil this year, while its imports from India have slowed due to high iron ore prices, he said.
Tokyo brokers said the market outlook was bullish as demand for vessels is expected to increase towards the year-end.
"Activity tends to pick up around this time of the year, which is making owners more bullish about raising their offers," said a broker at a Japanese shipping company.
"Demand from China is climbing steadily and demand to ship US crops will increase in the region, but the market is not facing tightness," he said.
Time-charter (TC) rates for the benchmark route from the US Gulf to Japan edged down to $27,500-$28,000 a day from $28,000-$30,000 a week earlier, brokers said.
Pacific TC rates were little changed at $18,000-$19,000 a day, against $18,000-$20,000 last week.
The market showed muted reaction amid growing concerns over bird flu in the region, which forced a key Taiwanese buyer to delay some year-end shipments of corn, Tokyo brokers said.
The caution over the disease grew after health officials last week estimated that up to 14,000 people in Taiwan could eventually die if there was an outbreak of the deadly H5N1 bird flu virus and it was allowed to spread unchecked.
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