Freight rates in Asia held steady on Tuesday on healthy demand to transport minerals, although ample availability of vessels prevented the market from rising sharply, shipping industry officials said on Tuesday.
Rates will likely drift around current levels for the rest of the week, with downward pressure from slower-than-expected grain business as bird flu cases spread in Asia, but with support from a firmer tone in the Capsize market, they said.
Spot voyage rates for modern panamax vessels for the benchmark US Gulf to Japan route were estimated at about $45-$46 a tonne on Tuesday, steady from a week earlier.
"Freight rates are supported by activity in the Atlantic market, where demand for Capsize vessels is strong," said an official at a Japanese shipping company.
Capesize ships carry more than 100,000 tonnes of cargo, mainly iron ore and coal, while panamax vessels carry 55,000-80,000 tonnes of freight, usually grains.
A decline in iron ore prices from India has also lent support to the market as shipowners expected a pick-up in business after buyers rushed to South America for cheaper iron ore, said an official with a shipping company in Seoul. Seasonal demand usually boosts freight rates towards the end of the year, but gains in rates were limited this year.
Shipping activity in Asia tends to pick up in the October-December quarter, as newly harvested grains from the United States, the top exporter of corn and soybeans, start to be shipped to their main markets of Japan, China and South Korea.
But traders said grain business this year was slow.
Vessel inquiries from China to import soybeans from the United States were less than the market had expected after the harvest of the new US soy crop, the Korean official said.
For corn business, the market has also seen a slowdown in shipment inquiries from the US Gulf to East Asia, he said.
Another industry official in Seoul said there had been little demand for US Gulf to Japan panamax voyages as some business was taken by slightly cheaper handymax vessels and diverted to the US Pacific Northwest to Japan business.