Panamax coal freight rates on established routes from South Africa's Richards Bay and Indonesian ports to India ended the week higher Friday, with shipping sources saying there had been a rise in the number of enquiries for September.
"At the beginning of the week we saw some enquiries from China and India for Indonesian cargoes," a Singapore-based source said. "Enquiries were mostly for September cargoes." The overall outlook is not exciting but there is hope that September will see an expected improvement as the holiday season ends, broker Braemar Seascope said in its weekly note on Thursday.
Panamax freight rates were supported by a slight increase in activity on the Atlantic basin, Greek broker Intermodal said in its weekly note Tuesday.
"Though this might be temporary, it has helped provide some positive sentiment in the market that things might be able to hold better off than what has been seen in the Capesize sector," the broker said.
A second Singapore-based source said freight rates were also being supported by the end of the industrial action by rail workers in Colombia, paving the way for resumption of coal transportation from producers Drummond, Glencore's Prodeco, and Goldman Sachs affiliate Colombian Natural Resources to coal export terminals.
"With the Colombian strikes now coming to an end in the Atlantic, one hopes to see more activity, there are however still plenty of spot ships available which will hinder the rise," Braemar Seascope said.
An India-based source said charterers wanted to take advantage of falling rates and have pushed more cargoes into the market, which lent some support to freight rates this week.
On Thursday, a small rise in freight rates was seen for a voyage from the Atlantic basin to Far East, but the market still looked depressing, a third Singapore-based source said.
"You may call it the 'perfect storm' with the drought in the US, global financial crisis, metal ore export ban in Indonesia, ban on iron ore export in India and weak demand from China, all impacting the freight market," he said.
IRON ORE REMAINS WEAK
Sources said the Indian iron ore market remained largely inactive. Demand has remained weak this past month as many traders have showed limited interest for both iron ore and coal cargoes, Intermodal said. Braemar Seascope also noted limited iron ore activity out of Iran to China.
Sources said although they had seen a few Supramax shipments of coal cargoes coming into Indian ports from Indonesia, activity on the Richards Bay to India route remained muted.
Platts assessed the daily Panamax coal freight rates from Richards Bay to India's west coast at $15.10/mt and to the east coast at $16.60/mt, both up 10 cents day on day and up 30 cents on the week.
Platts also assessed the daily Panamax freight rates from South Kalimantan to India's west coast at $9.20/mt and to the east coast at $8.20/mt, both unchanged on the day but up 40 cents on the week.
Charterers were now aiming for Panamax freight rates of $12-12.50/mt from Richards Bay to India, but owners' ideas were not immediately available, a second India-based source said, citing a lack of cargoes.
"Freight rates are all over the place. If we see one vessel fixed at $7,500/day, we have a similar vessel fixed at $4,500/day. So it is not encouraging at all," the first Singapore-based source said.
Due to weak activity on the Richards Bay to India route, it was becoming difficult to estimate freight rates, the first India-based source said.
Activity on the west coast of India was still limited due to the ongoing monsoon, but sources were hopeful of a rise in the number of fixtures in September after the monsoon ended.