Atlantic Panamax freight rates improve on tight prompt tonnage, better sentiment

2014-07-28

Freight rates ticked up for trans-Atlantic Panamax runs as prompt tonnage was met with a fair volume of inquiry, but the long-term outlook remained uncertain, shipping sources said.

The Hampton Roads, Virginia-Rotterdam coal route, basis 70,000 mt improved to $9.25/mt on Friday, up from $9/mt the day before. SVS was heard fixing on subs at $11/mt on its 70,000/10 mt cargo with 2-port load from Baltimore and Norfolk with discharge at Redcar for August 8 laycan. According to shipping sources, stems with one port load would be achieving $9.25-9.5/mt for similar dates. ArcelorMittal was heard fixing its Port Cartier, Canada-Ghent, Belgium 75,000/10 mt iron ore cargo at $8.5/mt level for August 7 laycan. The cheaper rate can be attributed to the shorter steaming time, compared to the Hampton Roads-Rotterdam voyage, sources said.

“It does feel a bit more positive in the North Atlantic,” said an operator. “There is still a tonnage bottleneck for promptish cargoes, so we might see further improvements if the cargoes keep flowing next week.”

The Mobile, Alabama-Rotterdam coal route, basis 70,000 mt also increased and was assessed at $12.75/mt, up from $12.5/mt. The 2011-built Yasa H Mehmet was heard fixed at $12.75/mt for its Mobile-ARA (Antwerp-Rotterdam-Amsterdam) cargo with August 11-14 loading dates. As shipping sources indicated, the tonnage list looks tighter in the US Gulf with the market likely to stay firm if more minerals and grain cargoes come out on Monday.

Freight rates for the Baltic-UK Continent runs followed a similar pattern with sources pegging time-charter rates at $5,750/d basis UKC delivery, up from $5,250/d. A 2012-built Kamsarmax Prabhu Sumat was heard fixed at $5,500/d for a Baltic/Skaw-Passero stem with July 30-August 4 laycan.

The Ventspils, Latvia-Rotterdam route also ticked up 25 cents, reaching $6/mt on Friday.

A few cargoes were heard still working in the Baltic on Friday, including Tata Steel with a 65,000/10 mt iron ore stem from Kokkola, Finland, to Immingham, UK (port costs at Immingham for charterer’s account) for August 5-11 loading. However, a number of sources were skeptical about the longer term prospects in the market.

“It looks like most of the spot requirements have been covered,” said a shipbroker. “The tonnage for middle August dates looks much more balanced and it seems that there are quite a few vessels that owners are hiding from the market to keep the rates up.”

According to industry participants, premiums are mostly being achieved on prompt requirements. With August historically being a quiet month in terms of activity, the current bottleneck is likely to be cleared soon, making the market even more reliant on the grain season in the Black Sea and US Gulf. An increasing volume of stems has already been heard working from the Black Sea with most of those being wheat exports from the Ukraine and Russia.

As shipping sources indicated, this might make trans-Atlantic runs to the Mediterranean and Black sea, like the ArcelorMittal 75,000/10 mt coal stem from Mobile to Yuzhny, Ukraine more attractive for shipowners. Though a complicated geo-political situation in the region may also make tonnage available for Ukrainian business quite tight, potentially putting positive pressure on the rates, sources said.

Source from : Platts

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