- Capesize market shows a rebound in C3 rates, but the P6 route remains under pressure due to weak demand.
- Vessel supply shows mixed trends, with declines in ballaster numbers for certain segments and a rise in Chinese port congestion.
- Iron ore prices rebound after six days of losses due to hopes of Chinese economic stimulus.
The freight market for Capesize and Panamax vessels has shown a mixed performance across routes and ship sizes. The declining supply of vessels in the region has tightened market dynamics, contributing to stronger rates, reports AJOT.
Freight Market Performance: Mixed Trends
On the C3 route (Brazil to China), freight rates for Capesize vessels remained stable at $27 per ton, representing a 40% year-on-year increase. This stability comes as the number of Capesize ballasters in the South Atlantic has decreased, reinforcing a potential rebound in C3 market rates.
Meanwhile, on the P6 route (Pacific), despite a drop in the number of ballasters, market rates have not risen. Weak demand for cargo movements along the Pacific route has exerted downward pressure on freight rates, and the market is not yet experiencing the same upward trend as seen on the C3 route. This disparity between the C3 and P6 routes reflects the complexity of the market, where supply reductions in one region don’t necessarily result in higher rates if demand remains weak.
Panamax vessel freight rates from the Continent to the Far East continued their downward trend, dropping below $36 per ton—a 16% decline compared to the previous month. Supramax vessels on the Indo-East Coast of India (ECI) route maintained rates at $11 per ton, showing a 17% increase from the same period last year. Handysize vessels on the NOPAC (North Pacific) to Far East route held steady at $34 per ton, reflecting an 11% year-on-year increase.
Vessel Supply: Mixed Trends in Ballaster Numbers
The dry bulk freight market has shown mixed performance. Rates on the Cape Brazil to North China routes have maintained the improvements seen in the first week of September, while the Panamax Continent to Far East route has continued to experience a persistent downward trend for the past five weeks.
‘The Big Picture’ – Capesize and Panamax Bulkers and Smaller Ship Sizes
- Capesize vessel freight rates for shipments from Brazil to North China remained steady at $27 per ton, marking a substantial 40% increase compared to the previous year.
- Panamax vessel freight rates from the Continent to the Far East have dropped below $36 per ton, a decline of 16% compared to the previous month.
- Supramax vessel freight rates on the Indo-ECI route still hovering around $11 per ton. This week’s rates are 17% higher than those recorded during the same period last year.
- Handysize freight rates for the NOPAC Far East route held steady at around $34 per ton, reflecting an 11% increase compared to rates from one year ago.
Supply Trend Lines for Key Load Areas
In the second week of September, the number of ballasters across dry vessel size categories showed a mixed trend, with the Handysize NOPAC market continuing to exhibit signs of growth.
- Capesize SE Africa: The number of ballast ships has begun to gradually increase, rising above the annual average of 110 to a current level of 115. However, this remains below the peak of 140 vessels observed at the end of week 31.
- Panamax SE Africa: The current number remains below the annual average of 140, having dropped by over 40 vessels compared to the peak level observed three weeks ago.
- Supramax SE Asia: The number of ballast ships has dropped significantly below the annual average of 100, indicating a downward trend in the first half of September. Current levels stand at 90 vessels, 10 fewer than two weeks ago.
- Handysize NOPAC: The number of ballasters has finally exceeded the annual average of 79 for the first time since the end of week 19, reaching 86 vessels—13 more than at the end of week 35.
Summary of Dry Bulk Demand, per Ship Size
In the second week of September, the outlook for dry tonne-days showed a declining trend across most segments, with the notable exception of the Supramax segment, which recorded an unexpected increase over the past month.
- Capesize: Recent estimates indicate an accelerated pace of tonne-day growth since the low point in week 31. However, a slight downward revision has emerged recently, with confirmation expected in the coming days.
- Panamax: Weekly percentage growth experienced a slight downward correction following the early signs of recovery from the previous week, though it remains above the levels observed in week 31.
- Supramax: The growth rate has maintained its upward trajectory since the end of week 27, with consistent improvement observed since early August. It now stands at the highest weekly growth rate recorded in the past 12 months.
- Handysize: The upward trend in the Handysize vessel segment reversed after week 27, with a continued downward shift extending into the first two weeks of September.
Dry bulk ships congested at Chinese ports
In the second week of September, Chinese dry bulk port congestion began to show signs of increasing, following a decline observed in the previous week.
- Capesize: Capesize ship congestion remained at the lower levels of the previous week, with around 120 vessels, down from the peak at the end of week 30 when congestion exceeded 140 vessels.
- Panamax: The number of Panamax vessels reached approximately 230, an increase of 30 compared to the end of the previous week.
- Supramax: Congestion levels remained elevated at around 300 vessels, consistent with the accelerated pace of the previous week. However, there were signs of a reduction, with nearly 30 fewer vessels compared to the levels at the end of week 33.
- Handysize: Congestion levels rose by nearly 100 vessels in the second week of September, an increase of 16 vessels compared to the previous week.
The dry bulk market is facing a period of mixed performance, with some segments showing positive momentum while others remain under pressure due to weak demand. The combination of supply and demand dynamics, along with external factors such as Chinese economic policy, will continue to shape market conditions in the coming months.
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Source: AJOT
