Panamax dry bulk rates were steady during the last week, although demand could pick up later this week from charterers shifting down from a tight Capesize market, brokers said on Tuesday. Capesize vessels, which carry more than 100,000 tonnes of cargo and are predominantly used to ship iron ore and coal, have been extremely tight in a recent weeks.
Charterers might now look to split up their Capesize cargoes into the smaller Panamax vessels, which carry 55,000-80,000 tonnes of freight, usually grain, in order to achieve better freight economics on their journeys, brokers said.
Modern Panamax rates for the benchmark route from the US Gulf to Japan were assessed at about $60.0-$61.5 per tonne, largely unchanged from a week earlier, East Asian brokers said.
Timecharter rates (TC) for US Gulf to Japan were quoted at $42,000-$43,000 a day, while rates for the Pacific market were pegged at $37,000-$39,000. The levels were also largely flat from a week earlier, the brokers said.
"The markets since last week have corrected and from the middle of this week they could strengthen helped by tight supplies of Capesize cargoes," an official in Seoul said.
The official said Japanese importers of coking coal and iron ore were maximising imports before term contracts terminate at the end of the first quarter of 2005. Import costs under the next round of term contracts were expected to rise.
GRAIN SHIPMENTS SUPPORT: Demand for an expected record crop harvest in the United States is expected to support the freight markets through the end of 2004, although activity has waned since the peak in October.
Asian traders have said China, the world's top soy importer, has deferred shipments of a few US soy cargoes due to falling domestic meal prices which have hit crushers' profit margins.
China's imports of raw materials have been a key force in shaping the shipping market. Its demand for grains and minerals sent Panamax rates to historic highs of about $75-$80 per tonne in February.
US trade sources said on Friday that analytical firm Informa Economics had estimated this year's US corn crop at a record 11.750 billion bushels, above the USDA's October estimate of 11.613 billion bushels.
Informa also forecast the US soy crop at 3.150 billion bushels, above the USDA's 3.107 billion bushel estimate, but below other market estimates of 3.3 billion bushels.