Dry CargoEurope

Freezing Baltic sends kamsarmaxes into unexpected $100,000 a day territory

Panamax, kamsarmax and post-panamax rates exploded yesterday with ice-classed ships booked for in excess of $100,000 a day as an extreme cold snap hits the Baltic Sea.

The seven-year-old, 95,527 dwt NBA Van Dyck was fixed for $100,000 a day while the one-year older, 82,099 dwt NBA Magritte kamsarmax fixed for a stunning $110,000 a day. Both ships – owned by Nippon Yusen Kaisha (NYK) – were reported to be breaching breaching international navigating limits (INL) in fixing these cargoes, giving rise to large premiums.

Another panamax ship was reported fixed for a Baltic voyage at $70,000 a day.

Panamax rates have been building all month, unlike their bigger cape cousins, leading some shippers to mull changing ship types.

Rates this week are 177% higher than their five-year average and sit considerably above their five-year range, according to Braemar ACM.

Panamax freight has become so expensive relative to the capes that charterers are rumoured to have considered loading panamax stems onto the larger vessels.

The opening weeks of 2021 have seen sharply increasing volumes of coal and grain being shipped around the world, which has led to a supply deficit in the Atlantic.

“Icy conditions in some ports have also driven large premiums for scarce ice-class Panamaxes, further fuelling a red-hot paper market,” Braemar ACM reported in a note to clients yesterday.

“Limited supplies from across the Atlantic and unfavourable international coal prices render Baltic coal highly competitive in Europe. Over the first half of February, Baltic shipments to ARA ports jumped by 53% on the year,” research from shipbrokers Arrow showed yesterday.

Bullish dry bulk reports are filtering in rapidly this month. UK-based Shipping Strategy maintained yesterday that the good start to 2021 for bulk carriers is set to continue beyond this year.

Shipping Strategy managing director, Mark Williams, commented: “As the public health emergency starts to come under better control, the global economy should rebound in 2021. We predict a supercharged recovery in emerging Asia GDP which will drive firm demand growth for the bulk carrier markets. Meanwhile, the fleet supply outlook is benign; net fleet growth this year may be only half the 3.6% of 2020.”

Breakwave Advisors is similarly bullish, expecting demand growth for dry bulk shipping to total almost three times the growth in net new supply.

“Although utilization is still well below the record high levels of the 2000s, directionally, utilization is heading to new multi-year highs that have the potential to push shipping rates much higher,” Breakwave predicted in a new report issued yesterday.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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