Panamax Freight Rates Dip After Two-Week Surge
After a steady climb over the past two weeks, average spot rates for panamax bulkers experienced a slight decline on Friday. This drop comes amid shifting coal market dynamics and an extended grain season in South America, which had previously driven freight rates higher. Despite the pullback, interest in period deals remains strong, with several new fixtures reported this week.
Market Overview
The Baltic Exchange reported a decrease of $242 in the average panamax rates, bringing the daily assessment to $16,623 for an 82,500-dwt vessel. This reduction marks the end of what the Exchange described as a “muddling week” for the panamax market. The week began positively for ship owners but concluded on a more subdued note, as rates across all benchmark routes fell by a few hundred dollars.
Transatlantic round trips from the European Continent were assessed at $18,950 per day, reflecting a $350 drop from Thursday’s rates. Although demand for fronthaul trips from the Americas remained robust earlier in the week, it waned as the days progressed. The Baltic noted that the September arrival window from East Coast South America remained a notable exception, with unchanged fundamentals and tighter tonnage counts.
In the East, assessments for transpacific round trips decreased by $224, now estimated at $14,170 per day. While coal trips from Australia had supported the market recently, rates began to decline as the week advanced. The Baltic highlighted that longer North Pacific trips were lacking, with only Indonesian coal runs into China showing some support.
Growing Interest in Period Deals
BRS Shipbrokers identified Indonesia as a key region where interest in period deals has surged, fueled by a bullish sentiment in the freight futures market. With the overall market trending upward, more ship owners are seeking period or laden leg business instead of single time-charter trips. Typically, vessels around 18 years old, opening in South China, are looking for rates between $13,000 and $14,000 per day, slightly below single-trip levels. However, a gap of $1,000 to $1,500 remains between owners and charterers.
Some Chinese operators anticipate a softening in the Indonesian market by mid-September, as the tonnage list may grow relative to limited fresh cargoes. The extent of this shift will depend on how much off-market cargo is still held by operators, with some suggesting that rates could still find support.
This week saw four kamsarmaxes and one post-panamax bulker fixed on period contracts. Classic Maritime secured the 82,000-dwt Musigny for 12 months at $15,750 per day, set to deliver from China’s Jiangsu New Hantong shipyard at the end of November. Additionally, two other kamsarmaxes were fixed for approximately six months at rates reflecting a premium for newer vessels.
Costamare Bulkers hired a 12-year-old kamsarmax from Grampus Marine for four to six months at $14,500 per day, while Bahri Dry Bulk fixed its five-year-old Aljazi for five to seven months at $16,000 per day. Notably, a post-panamax bulker was also fixed for a floating-rate contract based on 93% of the Baltic Panamax Index, marking a rare occurrence in the period fixture landscape.
