Freight rates for the benchmark Asian route hit a fresh-high this week, on healthy demand for spot cargo trades, as traders turned to lock in their end-of year shipping requirements.
Spot charter rates for modern panamax tonnages on the benchmark US Gulf-Japan route were pegged around $48 per tonne on Tuesday, up about $6 from week-ago levels, and about $5 higher than Monday's Baltic Exchange settlement.
"This is really a conservative peg for the day, but at the moment that is the minimum it's going to cost around $48, but it will go up because demand for tonnage is healthy," said a Tokyo based shipbroker. Shipowners said traders were eager to lock in their shipping requirements on a time-charter basis, as opposed to taking spot bookings.
"What this is doing is leaving fewer vessels on the spot market. For a shipowner it's easy, I would rather take a time-charter because of the long-term security than commit to a spot booking," said a Seoul based shipowner. Panamax vessels normally carry between 55,000 tonnes and 80,000 tonnes of cargo such as grains and coal, while Capsize vessels typically carry 80,000 tonnes, or more, of iron ore and coal.
Handymax spot charter rates on the benchmark US Gulf-Japan route were valued at around $45 a tonne on Tuesday, up about $5 from levels seen last week. Handymax vessels carry between 40,000 tonnes and 60,000 tonnes of major and minor bulk commodities including cement, which is shipped into the United States from China, Taiwan and Thailand.
Demand for raw materials in the US Gulf in particular, has been strong, as the region continues to work on reconstruction efforts following last year's devastating hurricane season. "As far as we can see, this is an active trade run, and should stay this way at least until the end of the year, but again a lot will depend on the hurricane season this year," a shipbroker said.
Shipping sources said that they had yet to see freight rates globally affected by the conflict in the Middle East, but warned that if Iran was drawn into the warring, the outlook could change. "Lebanon and Israel, are small markets, but if you have a larger nation like Iran getting involved, or if say sanctions are slapped on them which limits and restricts trade, then we could see a more significant impact on freight rates for bulk carriers," said a South Korean shipowner.
Time-charter rates for the US Gulf-Japan route for handymax vessels were pegged at around $27,000, about $2000 higher than week-ago levels, while the panamax was seen valued at $27,000 about $1000 higher than levels seen on August 1.