Ocean freight for dry commodities on major Asian export routes traded at two-month highs on Tuesday as freight costs on the Baltic Exchange, the world's leading index, hit new records this week.
Massive demand for natural resources in China, high port congestion at key export terminals in the Pacific, and seasonal demand for grain and coal squeezed continued to pressure tonnage supply. Period charter rates for modern Panamax tonnages booked on trans-Pacific voyages were valued at around $62,000, up 16 percent from week-ago levels, but broadly unchanged from levels seen on Monday's Baltic Exchange settlement.
The Baltic Exchange's dry freight index, which measures the global strength of seaborne trade for dry commodities, continues to set records hitting 7,066 points on Monday. The Baltic Exchange's Panamax Index, however, fell to 7,002 points, down 71 points from levels seen the previous week.
Port congestion at Australia's Newcastle coal terminal, the largest in the country, and a key global export hub for the winter fuel, continues to show no signs of easing to a manageable level, said UK based shipbroker Galbraith, in its research report for the week ended August 10.
"Congestion remains a major factor and is distorting fleet availability; it is expected to gradually decline over the next 12 months but this can be a slow process and at times there will be occasions when congestion increases," Galbraith said.
Although vessel waiting times at the port fell to around just below 21 days for the week ended August 13, but vessel queues edged higher to 59 ships from the previous week's 55, Newcastle port data showed. Global economic growth forecasts also continue to suggest that demand will be robust, giving rise to growing demand for tonnage.
Galbraith said "demand continues at record levels and could accelerate in the remaining months of the year due to normal seasonal influences (re-stocking of steam coal at power stations in advance of the northern hemisphere winter, grain exports from the US Gulf)."
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