Disappointing demand from China and lower-than-expected spot orders for minerals and grains dragged down shipping rates in Asia this week, brokers said. Panamax dry bulk rates for the benchmark US Gulf-Japan route were indicated at about $57-59 a tonne on a spot basis, down from $61-63 last week, regional brokers said.
The market has declined since jumping to around $65 early in January on expectations Chinese demand would pick up ahead of the Lunar New Year holiday early in February.
The market had also expected Asian importers to maximise coking coal and iron ore imports before their term contracts expire at the end of the first quarter, as the next round of contracts would incorporate higher prices.
But shipments have been smaller than anticipated as importers carried heavy stockpiles, brokers said.
"We had expected fresh orders would emerge, especially for the transportation of coal and other minerals. But actual business has been disappointing," a Tokyo broker said.
"By the Lunar New Year, the rates are expected to remain weak, although they might recover slightly later this month helped by technical support," a Seoul broker said.
An official at a Japanese shipping company who heard a deal was done on Monday at $59 for March shipment, said charterers now aimed for rates below $55, while many shipowners were still eager to gain at least $60.
Last December, panamax rates soared as high as $70-$75 on robust Chinese demand for commodities, coming close to the record high of $75-$80 seen in February last year.
Japanese demand could also pick up towards end-March book closing, as they import as much raw materials as possible before costs rise under new contracts beginning in April, the shipping company official said.
In the period market, time-charter rates for the US Gulf to Japan route were quoted on Tuesday at around or slightly below $40,000 a day, compared with $40,000-$41,000 a week ago, brokers said.
The rate for the Pacific market was around $30,000 a day, down from $33,000-$34,000 last week.
From Europe to East Asia, rates were offered at about $40,000 a day, compared with $45,000.
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