Panamax Rates Likely To Ease

Asian Panamax rates for dry bulk cargo are likely to ease further this week on soft demand for mineral and grain shipment, with many spot vessels available for hire in the market. "There have been few fresh spot inquiries by charterers," said a shipping broker. "In addition to this, the Panamax market has been under pressure from an oversupply of spot ships." Panamax rates for freights from the U.S. Gulf to Japan were indicated at $21.50-$22.00 a ton for March shipment, against $23.00 from a week ago, he said. The broker also put indication rates for April shipment around $22.50-$23.00 on hopes of a rise in vessel demand, as the South American grain export season starts in the same month. But no fixtures have been reported. In the market, one Japanese trading house was said to have fixed a Panamax vessel last week at $21.25 a ton to carry about 54,000 tons of heavy grain from the U.S. Gulf to Japan for February shipment, another broker said. Freight rates to South Korea and Taiwan were about $1.00 a ton less than those for U.S. Gulf/Japan, reflecting higher port charges in Japan, brokers said. The Panamax rates in the Asian market were also taking their cue from a soft tone in the Atlantic Panamax market, along with weakening freight rates for Capesize and Handysize, said a broker in Tokyo. Timecharter rates for the U.S. Gulf to Japan were at $10,750 a day plus $200,000 ballast bonus, against $11,000 a day plus $230,000 ballast bonus a week earlier, the Tokyo broker said. Timecharter rates for the Pacific round for modern Panamax vessels also fell to $12,500-$12,750 a day, from $13,250-$13,500 early last week, he added. Production cutbacks in the global steel sector and a scheduled influx of newly built vessels this year have been casting a cloud over the outlook for the dry bulk market, brokers said. Uncertainty over the outlook for the U.S. economy has forced many steel producers in Europe, Asia and the United States to cut crude steel output. The most recent cutback was made by Corus Group, which announced last week the closure of two of its British plants, resulting in a capacity cut of over three million tons. About 100 newly built vessels of 50,000-80,000 tons would be delivered to the market this year, up from about 70 vessels last year, brokers said. In 2002, about 60 to 70 newly built vessels are expected to be delivered to the market. - (Reuters)