Freight rates for the benchmark Asian route were firm compared to week-ago levels, with traders struggling to find spot tonnage as period charter bookings continued to take supply off the market.
Spot charter rates for modern panamax tonnages on the benchmark US Gulf-Japan route were valued at around $50-51 per tonne on Tuesday, about $2-3 higher than the Baltic Exchange settlement seen last Tuesday.
"Although the demand is beginning to taper off for the period-charter vessels, shipowners are still offering levels as high as $55 per tonne to the market," said a Tokyo-based shipbroker.
Sentiment remains bullish, riding on demand from India, which is seeking to buy about 1.67 million tonnes of wheat, likely to come from Australia, Canada and the United States.
The delivery of these cargoes is slated for between November and February 2007. The purchase of this requirement will lift India's total wheat imports to 3.83 million tonnes since March.
India has been forced to import due to poor domestic yields. "We should see demand for panamax and possibly even the handymax tonnage in demand through the end of the year," a Singapore-based shipbroker said.
Panamax vessels normally carry between 55,000 tonnes and 80,000 tonnes of cargo such as grains and coal, while capsize vessels typically carry about 80,000 tonnes or more of iron ore and coal. Levels for handymax vessels, which continue to see high demand for voyages from the Far East to the US Gulf Coast, were at about $51-53.
However, some shipbrokers see delays and postponement of coal stems in Indonesia as likely to stop levels for handymax vessels rising further. Time charter rates for handymax vessels were valued at around $29,000, about $1,000 higher than last week, while panamax rates were seen at around $31,000, also up $1,000 from week-ago levels.