Freight rates for the benchmark Asian route eased from six-month highs of last week as demand for spot cargoes slowed and shippers turned their attention to handymax vessels.
Spot charter rates for modern panamax tonnages on the key US Gulf-Japan route were pegged around $38 per tonne on Tuesday, down about $4 from a week earlier and unchanged from Monday's Baltic Exchange settlement, brokers said.
"There has been no spot fixtures in the market since late last week and this is largely due to charterers seeing the panamax market as being overvalued. So most are now diverting their attention to smaller handymax-sized vessels," said one South Korean shipowner.
Panamax vessels normally carry between 55,000 tonnes to 80,000 tonnes of cargo such as grains and coal. Tokyo-based brokers said charterers were keen to employ handymax vessels because of plentiful availability in the US Gulf Coast. They were valued around $38 a tonne, similar to spot quotes for panamax vessels.
Handymax vessels carry between 40,000 tonnes to 60,000 tonnes of major and minor bulk commodities including cement, which is shipped into the United States from China, Taiwan and Thailand.
"Since the hurricanes last year the US Gulf has been undergoing massive reconstruction and demand for cement has surged. So we see a lot of handymax vessels being employed to make these runs," said a Tokyo-based shipbroker.
Brokers said shipowners, keen to avoid sending their ships without a booking on their return voyages, were willing to be flexible with their spot charter offers.
"The synergy between charterers and shipowners is rare but on handymax vessels, both stand to win. The shipowner doesn't have to lose on an empty return trip to Asia and the charterer has a cheaper alternative to the spot panamax market," said one Singapore-based shipbroker.
Brokers said buoyant demand for handymax tonnages could lift spot charter levels to about $40-42 by the end of the week, as demand for regular runs within Asia could rise.
Shipbrokers said they were also eyeing weather-related delays in Asia, which could pull some tonnages out of the market and lift rates further. Shippers were currently facing delays of 1-2 days at Indian ports and 3-5 days at ports in South Korea, Taiwan and China.