After dip, freight rates seen stable to slightly higher

By Brannvoll ApS, Denmark

The USG Supramax spot freight market was strong during the first half of the month.  Rates were increasing thanks to consistent fronthaul demand while shortage of tonnage in the United States East Coast (USEC) area presented attractive options for vessels free in the North Coast South America (NCSA) area, which usually prefer to ballast towards USG. However, at the end of the month, it became evident that fresh demand was lacking for transatlantic trips from USG. Eventually, the USG market lost momentum and amid tonnage oversupply in the region, rates started dropping closer to the end of the month.

Freight rates for transportation of a Supramax-lot of petcoke from Houston to ARA ports with spot laycans are at US$21/t on average. Deals for delivery of 50,000t of petcoke from Houston to Iskenderun with spot laycans are discussed at around US$25.50/t on average. Shipping costs for delivery of a Supramax-lot of petcoke from USG to EC India are at US$46.50/t on average.

Supramax freight rates for petcoke from Houston, USA, 7 March 2019-7 November 2023

The outlook remains positive for ship owners as we enter the 4Q23, which is traditionally the strongest period for the dry bulk freight market. As the US grain season is gaining momentum the rates for shipments from the USG ports will grow. Nevertheless, it should be noted that since the American grains prices are not helping with competitiveness, the active export season might be delayed for a month or so, which will keep the freight rates at present levels in the short-term.