Dry bulk freight rates for Panamax vessels edged slightly lower in the week to Wednesday June 5, reaching two-month lows due to lukewarm demand for grains and oilseeds in South America and falling crude oil prices. Rates for the Brazil-Northeast Asia route fell by $0.40 per tonne in the week to $45 per tonne, while prices for the US Gulf-Northeast Asia route fell to $58.00 per tonne from $58.70 per tonne a week earlier.
A surplus of vessels in the Atlantic basin, coupled with somewhat quiet demand in South America, pushed Panamax freight rates lower in the week.
Excess tonnage and lower rates were also noted in Europe and the US.
Falling crude oil prices contributed to the downswing, with WTI and Brent contracts down by 6.0-6.5% over the past week.
Crude price drop partly due to supply cut
The drop in crude prices is partly linked to a decision by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to gradually reduce the supply cut of 2.2 million barrels per day currently in place, starting to reintroduce those volumes into the market in the fourth quarter.
Capesize rates in the Atlantic were broadly stable on large tonnage availability, but rates picked up in the Pacific basin due to good demand for coal and iron ore shipments.
Demand for Handysize vessels picked up both in the Atlantic and the Pacific, while the container market continued to face headwinds – freight rates were up because diversions from the Red Sea increase voyage times, disrupt shipping schedules and create bottlenecks both in Europe and Asia.
Freight rates for vessels carrying palm oil cargoes from Southeast Asia to key destination markets have inched up marginally from last week, with a steady volume of vessel inquiries for June shipment.
Rates for 18,000-to-20,000-tonne vessels carrying palm oil from Southeast Asia to the west coast of India increased to $48 per tonne from $47 per tonne in the previous week, while freight rates for 10,000-to-12,000-tonne vessels moving palm oil to the east coast of India and Chittagong were $37.50 per tonne, up from $37 per tonne a week earlier.
For shipments to China, freight rates for 12,000-to-15,000-tonne vessels were $37-47 per tonne, up from $36-45 per tonne in the previous week.
Freight rates fall in black sea region
Freight rates in the Black Sea region declined in the week to Wednesday, with less cargoes available for loading amid the end of the marketing year.
The Panamax freight rate out of Russia’s Novorossiysk port to Egypt went down slightly, with current ideas indicated at $16-18 per tonne.
The Handysize freight rate from the Ukrainian Black Sea to the Spanish Mediterranean fell by almost $4 per tonne, with ideas indicated at $19 per tonne for spot loading.
Meanwhile, the Handysize rate from the Constanta port to the same destination declined by around $2 per tonne to $14-15 per tonne.
There were no fresh indications for Asian destinations from the Black Sea region, leaving rates for loading in Ukraine to China nominally around $53-55 per tonne.
In the shallow water market, rates from Ukrainian Danube ports into Marmara were heard steady at $16-17 per tonne for Coaster-sized vessels.
Meanwhile, rates in Azov dropped significantly to $23-25 per tonne from $31-32 per tonne amid a lack of cargoes available because a limited number of trade companies have quotas available, and because of incoming Turkish national holidays.
This report has been updated to include information on freight rates in the Black Sea region in paragraphs 12-18.
