There’s some optimism in the panamax period market as major charterers continue to pick up vessels for charters of up to 12 months.

The past week has seen Glencore, Norden and United Bulk Carriers each take a panamax on six-month charters at daily rates of between $8,250 and $9,150. Hudson Shipping also booked a Diana-owned panamax for 12 months sat a rate of $7,900 per day (minus 5% commission).

During the three months since March 23, the market has seen 60 panamax vessels booked on period charters – a little ways behind the 77 fixtures we tracked during the same period last year, according to Alibra research.

Charterers have this year been a little more inclined to book for periods of 12 months or more, with even a rare two-year fixture being seen. Rates have also improved, compared to last year. Twelve-month and six-month rates hit highs of $12,650 per day and $14,000 per day respectively during the past three months. During the same period last year, the respective period rates hit highs of $6,300 and $7,000 daily.

The period market has, of course, been bolstered by growth in spot rates. The Baltic Panamax Index’s weighted timecharter rate (for voyages on five major cape routes) was assessed on Thursday at $8,888 per day, exactly double the level seen 12 months previously.

Spot rates have advanced on all major benchmark routes during the past few weeks, but especially on Australia-China routes for coal. Rates for Trans-Atlantic voyages for short-haul runs and to Europe have done well, as have trips from the Continent to the Far East.

The increased number of period fixtures reported in June so far (12, compared to just 7 in May) certainly suggests major charterers expect spot rates to rise further during the next six months.

Generally speaking, commodity markets have come back with a vengeance compared to a year ago, which we hope will continue.

The panamax market is still being haunted by the spectre of fleet overcapacity, however. Some 142 new panamaxes are awaiting delivery from shipyards this year (of which 66 have already arrived), which is equivalent to gross fleet growth of 6.9% in terms of number of vessels or 4% in terms of tonnage. Another 56 panamaxes are scheduled for delivery from 2018 onwards.

Shipowners have done well to scrap older tonnage over the past few years, which has trimmed the global trading fleet. It certainly wouldn’t hurt to keep scrapping during 2017.

So far, 16 panamaxes have been sold for demolition this year.

Source: Alibra Shipping