Panamax coal freight rates on established routes from South Africa's Richards Bay and Indonesia to India ended the week higher on Friday as grain cargoes in the Atlantic basin absorbed tonnages from both hemispheres, sources said.
Panamax freight rates are expected to remain strong in the coming weeks, helped by grain cargoes from the east coast of South America, sources said.
"[The grain season] peaks in March-May so we are fixing that window now," a Singapore-based source said.
A second Singapore-based source said vessels were ballasting to the Atlantic where they were getting better freight rates and as such, tonnage availability in the Pacific had become tight currently.
"The Chinese also have come back into the market from holidays and there are more cargoes available now," he said, adding that the strength in freight rates is expected to continue for the next few weeks.
He also said that several vessels were currently slow steaming, leading to longer voyages.
Nickel ore cargoes to China from Indonesia were also lending a boost to Panamax freight rates, he said.
"[There is a] good flow of cargoes and consequently charterers had to pay up to $2-3/mt [higher] in order to secure tonnage. This continued in the beginning of this week especially for early and middle March dates," broker Fearnleys said in its weekly note on Wednesday.
"With China and Singapore back, the activity level was significantly up this week. And some orders still circulated showing it is not easy to secure tonnage," Fearnleys said.
The firming of activity in the Atlantic basin this week helped support a strong recovery in freight rates for Panamaxes, Greek shipbroker Intermodal said in its weekly note Tuesday.
Freight rate levels, however, were still close to the bottom, the broker said.
"However, such a turnaround is just what the market needed and if activity holds for a few more weeks we may well see freight levels hold slightly better in the first quarter of 2013," Intermodal said.
Platts assessed daily Panamax coal freight rates from Richards Bay to India's west coast at $15/mt and to the east coast at $16/mt, both up 50 cents from Thursday and up $1 week on week.
Platts also assessed the daily Panamax coal freight rates from South Kalimantan to India's west coast at $9/mt and to the east coast at $8/mt, both up 30 cents from Thursday and up $1 week on week.
"Sentiment remains steady and is expected to continue into next week," broker Braemar Seascope said in its weekly note Thursday.
"The Pacific market has maintained the momentum of last week, with ships being fixed at improved levels and some charterers appearing to struggle finding good period candidates," the broker said.
CAPESIZES REMAIN WEAK
However, Capesize freight rates remained under pressure despite a few fixtures being reported, sources said.
"Capes continued to show a negative trend for another week, as the market was overall starved of any fresh inquiries," Intermodal said. "The Lunar [New Year] festivities may now be over; however, there is little expectation of a quick recovery as the current stockpiles [of iron ore] in China still hold fairly high."
Most of the activity this week has been in the Pacific, with West Australia seeing freight rates maintained around the mid $7s/mt, Braemar said.
Brazil-China has not seen much activity, but $18/mt has been reported fixed, despite a number of ballasters still hoping to achieve closer to $18.50/mt, the broker added.
"With volume concerns in East Coast Australia, and the Colombian strike continuing to have an impact on volume for transatlantic routes, rates continue to fall," Fearnleys said, referring to the mine workers' strike at Cerrejon, Colombia's largest coal miner.
