13-03-2017

Dry bulk: Atlantic Supramax freight rates under pressure as heavy tonnage outweighs cargoes

Supramax

A long tonnage list for the second half of March is likely to see Supramax rates out of the US Gulf Coast come down next week, according to market sources.

Time-charter rates for the front-haul grain runs from the US Gulf Coast to the Far East already dipped this week as tonnage kept accumulating in the Atlantic.

According to shipping sources, $18,000-$19,000/d levels were heard traded for Ultramaxes on Thursday, which is a drop of $3,000/d from last week when a 64,000 dwt Ultramax Bao Tong, was heard fixed at $22,000/d by Marubeni for a grains trip to Japan.

This puts the usually cheaper Supramax vessels in the $17,000-$18,000/d range.

Voyage rates for now have been slower to respond to the bearish sentiment, with the New Orleans to Kashima grains route, basis 50,000 mt, assessed at $37.50/mt Thursday, $1.25 up from last week.

However, as the tonnage to cargo asymmetry becomes clearer the next week, voyage rates are likely to cave under the downward pressure too.

“We count as many as 80 ships available for load in the US within the next 40 days,” said a ship operator. “I would be amazed if this does not have an impact.”

At the same time, a decline in rates might be short-term as cargo availability is expected to improve by the end of the month, with increased petcoke demand from India as well as Turkey ahead of the construction season beginning in April.

Further inquiries may emerge from Chinese participants who have been making frequent petcoke inquiries after a period of quiet activity, sources said.

Source: Platts

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