Bulk freight rates to increase

Rates for panamax dry bulk carriers on key Asian freight routes are expected to rise next week, supported by strong trans-Pacific grain shipments and intra-Asia coal trade.

In the capesize market, rates are seen lower on waning Chinese iron ore demand as Beijing's tightens credit availability to fight inflation, shipbrokers said.
The rate for panamax vessels travelling via the trans-Pacific route rose to $14,900 a day on Wednesday from $13,798 last week on strong Indonesian coal demand and Asian imports of South American grain. The market hit a two-month high of $14,926 on Tuesday.
''June loaders for a still active east coast South America grain season and Indonesian coal requirements have pushed the market in both hemispheres to be more comfortable than perhaps anticipated,'' said broker firm Fearnleys.
''The so-called summer lull is not here - yet.''
In the supramax market, the picture was more bearish with shipments from the east coast of India to China plummeting to a two-year low of $10,588 a day from $12,346 last week on limited iron ore trade between the two countries.
''There isn't a lot coming out of India despite the lifting of the iron ore export ban in Karnataka state. The lack of business is a bit of a surprise for the market,'' said a Singapore-based shipbroker.
Karnataka was asked by the country's top court two months ago to lift the ban on shipments, but the state says it is facing procedural delays in resuming shipments.
Iron ore exports from India's Mormugao port fell 11.8 percent to 8.2 million tonnes in April-May largely due to a sharp rise in an export tax and softening demand from China, a trend likely to continue in the coming months as monsoon rains affect shipments.
Huge stockpiles of iron ore at Chinese ports have also hit Indian exports.
Source: Reuters