Asian Panamax cargo rates for grains and minerals are likely to ease this week after a recent surge sent charterers to the sidelines, but demand in the Pacific market remains robust, traders said last week.
"Charterers are reluctant to make deals due to recent higher rates, while ship owners are apparently not agreeing to discounts given the current firm market sentiment," said a shipping broker.
Charterers were holding back on striking fixture deals in the hope of a decline in freight rates as well as bunker prices, he said.
There have been no fixture deals between charterers and ship owners since the middle of last week, he said.
But he said demand for Panamax cargoes, especially in the Pacific region, would likely remain brisk due to steady demand for coal shipments from Australia, China and Indonesia and rising demand for soybean shipments from South America.
Demand for Panamax cargoes from China has also risen, as the country has been aggressively selling large quantities of corn to South Korea since the beginning of this year, he said. Demand for Chinese corn shipments used to be a cargo of less than 20,000 tons.
But the rise in demand for Panamax cargoes for Chinese corn would likely weigh on shipping demand for U.S. corn, depressing freight rates for U.S. Gulf/Japan, another trader said.
A surge in bunker prices was also behind the sharp rise in freight rates since last month, he said.
Spot freight rates for U.S. Gulf/Japan for Panamax-sized cargoes were at $23.90-$24.25 per ton, up from $20.50-20.75 a month ago, a broker in Seoul said.
U.S. Gulf/Japan freight rates for Panamax shipment for late April and May were at $24.00-$24.50 a ton, up from slightly more than $22.00 a ton in mid-February, he said.
Freight rates to South Korea and Taiwan were expected to be $0.25-$0.50 a ton less than those for U.S. Gulf/Japan for both spot shipment and one-month forward, he said.
There have been no fixtures for freight rates for U.S. Pacific Northwest
/Japan, but he said rates for Panamax cargoes were indicated at about $19.50-$20.00 a ton this week, up from $15.00-15.50 a ton in mid-February.
He said spot timecharter rates
for U.S. Pacific Northwest/Japan for modern Panamaxes rose to $13,000-$13,500 daily this week from $11,000-11,500 daily in mid-February. - (Reuters)