April coal cargoes keep Pacific rates firming.
Panamax owners with tonnage trading in the Pacific region could be heading for a more pedestrian approach to the market, with a lull in fixing activity that might rein in advances, writes Keith Wallis in Hong Kong.
However, brokers believe there could be another rates surge later this month on the back of an increasing number of coal fixtures. ?The fire in the Pacific panamax market has cooled a little, but it would not take much for the sector to flare up again,? said one Singapore-based broker. ?Basically, owners asked for higher and higher numbers but charterers drew a line in the sand last week and pulled cargoes which reined in owners rates expectations.?
The broker added: ?The Pacific market for panamaxes is still firm, but after what happened in the past month one would expect the market to correct itself and that is what happened last week.
?There will be a lull until April coal cargoes start coming out.?
A Hong Kong-based broker thought this was borne out by firmness in the paper markets last week for the second quarter. ?There is expectation that the dip seen in Pacific rates last week was only temporarily,? the broker said.
He admitted that the fall early last week was a surprise given the sentiment among owners, but with hindsight could have been seen given the strength of the grain market.
?The panamax market in the Pacific needed to take a breather,? the broker said. ?There was renewed activity at the end of last week and the market started to climb again, albeit with not such big numbers.?
He added that rates for a Pacific round voyage are around $32,000 per day, slightly ahead of last week"s levels. ?Owners appear to be quite modest in the expectations, with most looking at around $32,500-$33,000 per day. Charterers are not so sure. But we will see what the week brings,? he said.
Brokers said fixtures included the 1998-built, 73,326 dwt Bulk Fern that was taken by unknown charterers for a coal cargo from Indonesia to southern China at $30,000 per day. Sinochart took the 1992-built, 73,505 dwt Polska Walczaca for a similar voyage with a coal cargo at $28,000 per day.
By comparison, backhaul rates from the Far East to northwest Europe are also firm at around $20,000 per day in the expectation of a further boost from grain cargoes from the east coast of South America, brokers said.
Brokers added that the market to charter vessels for longer periods of time had started to move sideways with rates this week at similar levels to last week, at around $32,000-$33,000 per day for 3-5 months.
?Owners and charterers are beginning to have different ideas on where the market is going over the next few months, which has been reflected in activity levels,? said the Singapore broker.
?Owners particularly want to be ready for what they assume will be a surge in the next few weeks, so prefer to trade spot.?