Asian Panamax freight rates for the benchmark Asian route hit a new six-month high, supported by strong South Korean demand, shipbrokers and traders said on Tuesday.
Spot charter rates for modern panamax tonnage between the US Gulf and Japan, were pegged around $45 per tonne on Tuesday, up $6 from week-ago levels and about $5 higher than Monday's Baltic Exchange settlement, which closed at its highest level since early January on Monday.
Panamax vessels typically carry between 55,000 to 80,000 tonnes of cargo, like grains and coal. Tokyo-based brokers are expecting the market to taper off slightly, though they remain bullish on overall market sentiment. "The activity from the Chinese has been slightly muted and that could cap a further rise in the market this week, but overall there is strong demand for tonnage, and that doesn't look like it is going to change in the long run," said a shipbroker in Tokyo.
China has been struggling to find ample storage for its iron ore, and shipbrokers and shipowners in Asia said this was a reason for its short-term retreat to the sidelines this week.
China imported 24.568 million tonnes of iron ore in May, up 12.8 percent from month-ago levels, while total imports from January through May was at 132.625 million tonnes, up 21.2 percent from the same period last year.
China, the world's largest steel producer, has been ramping up production levels due to healthy profit margins, and industry analysts do not expect the sector to slow any time soon. Time-charter rates for the benchmark route from the US Gulf to Japan were estimated around $25,000, about $3,000 higher than a week earlier.
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