Panamax freight rates for benchmark Asian routes edged higher on Tuesday due to a brisk flow of cargoes such as grain, with firm rates for large vessels supported by iron ore and coal providing overall support.
Spot voyage fixtures for modern panamax rates for the benchmark US Gulf to Japan route were quoted around $35-$36 per tonne, up from $34-$35 a week earlier.
"Freight rates are lower compared to levels seen last year and the year before, but demand is there," said a broker at a Japanese shipping company. "Demand to ship grain from South America is in full swing, providing overall support."
Freight rates for capsize vessels stayed firm this week after edging higher last week amid speculation that Chinese steel mills have accepted a 19 percent rise in iron ore term price talks, Japanese brokers said.
"Even without a deal, Chinese demand to ship iron ore from places like India continues to be strong," the broker said. Brazil's CVRD, the world's top iron ore producer, has concluded talks with steel makers in Germany, Japan and South Korea for a term price rise of 19 percent, while China still has not clinched a deal.
Chinese steel mills, headed by Baosteel Group, have held off on accepting the price rise, first settled between CVRD and Germany's ThyssenKrupp AG, claiming the right to lead negotiations with the miners.
Capsize ships carry more than 100,000 tonnes of cargo, mainly iron ore and coal.
Another Tokyo-based shipping broker said shipments of coal, particularly in the Pacific region, appeared to be a little more active than usual, helping to buoy rates. But he thought the market was fairly balanced with new vessels absorbing much of the active demand for ships.