Freight rates for front-haul grain voyages from the Atlantic are rising on strong demand ahead of the Chinese New Year holidays and in anticipation of the new soybean crop in Brazil.
The 60,000 mt grain route from New Orleans to Qingdao, China rose by 50 cents on Thursday to $33.50/mt. Demand was boosted by traders trying to tie in their books before the long break and buying extra volumes of old crop soybeans from East Coast South America, sources said.
With most vessels in the region now chasing the ECSA front-haul business, the US Gulf freight was supported by the resulting tight tonnage. At the same time, the grain route from Santos, Brazil to Qingdao, China basis 60,000 mt was assessed unchanged, but supported at $24/mt on Thursday.
Market participants said they expected freight rates for grain from South America will rise sharply once China comes back from the holidays.
“China will need to refill stockpiles after the break,” a shipbroker said. “And Brazil will be happy to help, especially with the new soybean crop coming up in February.”
The bullish sentiment is being further fueled by a supported paper market. According to data from Freight Investor Services, Panamax forward freight agreement prices for the first quarter of 2017 were trading at $7,700/day on Thursday up from $7,125/day a week earlier.
However, according to industry participants, it is not yet clear how significant the rise in freight rates will be in February as the new grain season is already attracting more ballasters from the Far East. “The Pacific market is quite soft,” a ship operator said. “We count about 60 vessels that could be potential candidates for South American grains in the second half of February.”
Source: PlattsPrevious Next
2018 is Likely To Be The Best Growth Year Since 2011:Mr Vishavdeep Gautam, C O O , WOMAR Logistics
India Tanker Shipping Trade Summit 2018