- In March 2024, the shipping industry displays robust freight rates across diverse vessel categories, signaling resilience despite emerging challenges.
- Major routes experience notable increases, with the Capesize Brazil to N China route reaching a yearly peak at $23 per ton.
- However, uncertainties prevail, especially in the Chinese economy, adding a layer of caution to the overall market dynamics.
Freight Rate Dynamics
The freight rate landscape showcases remarkable trends in various key routes. The Capesize Brazil to N China route stands out by reaching the highest point for the year at $23 per ton, indicating a substantial 40% increase compared to rates observed just a month ago. Panamax rates maintain stability, hovering around $38 per ton for shipments from the Continent to the Far East. Additionally, Supramax rates on the Indo-ECI route exhibit strength, recording a significant $13 per ton increase, marking a notable 30% rise compared to rates observed a month ago. Handysize rates for the NOPAC Far East route surge to $37 per ton, reflecting a $5 increase from the previous week and representing a remarkable 30% upturn from rates observed a month ago.
Ballast Ship Trends
Ballast ship trends provide insights into the overall shipping demand and supply dynamics. Despite a decline in ballast vessels, numbers remain above annual averages for large vessel size categories. Notably, the Capesize SE Africa region witnesses over 130 ballast ships, maintaining levels approximately 30% higher than the annual average. Conversely, Panamax SE Africa experiences a 20% decrease in ballast ships, indicating a potential downward trend. The Supramax SE Asia route consistently stays below the annual average, currently hovering around 97 vessels. Handysize NOPAC observes a decrease to 81 ballast ships, signaling a decline from the previous week and reaching a similar low point as recorded in week 7.
Tonne Day Demand
The demand for tonne days, a crucial metric reflecting shipping demand, has undergone a sustained decline across all vessel size categories throughout the month. However, early March shows initial indications of an upturn in the Capesize and Panamax vessel segments. Capesize vessels exhibit a positive trend, though notably subdued compared to the robust pace observed at the beginning of the year. Panamax vessels experience a notable increase, reaching one of the highest points observed since the lows recorded four weeks ago. In the Supramax segment, the growth rate has remained stagnant for the past five weeks, showing stronger resilience compared to other size categories, albeit exhibiting a downward revision trend from its peak in week 5. Handysize vessels persist with a weaker growth trend over the last two weeks, although the growth remains higher than that recorded in the Panamax segment.
Chinese Congestion Levels
Chinese congestion levels have once again begun to rise following the previous weekly drop, with the increase primarily driven by the Supramax segment. Capesize congestion surpasses the 120-vessel mark, signaling an increase of about 10 vessels from the levels observed in the previous week. In the case of Panamax vessels, the count has surged to 199, coming within striking distance of the peak of over 200 recorded four weeks ago. Supramax congestion has surged to 277, marking a 10-vessel increase compared to the previous week and approaching the 300 mark recorded during week 6. Handysize congestion levels soar to the 200 mark, reflecting a notable increase of 20 compared to the previous week, although they remained lower than levels observed three weeks ago.
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Source: Break Wave Advisors
