Grain of optimism for panamax period rates

Grains commodity giant Bunge and Italian operator Rizzo Bottiglieri De Carlini Armatori locked in one-year charter deals for panamax vessels at rates of between US$16,500-US$17,500 per day.
Those rates were up by 9%-15% on current one-year period charter rates for a modern panamax vessel, London broker Clarksons said.
Driving the unexpected May rates rise have been greater-than-expected grains and coal cargoes, as well as a shortage of immediately available panamaxes in the Atlantic trading region.
Brokers said the shortage reflected a recent change in trading patterns. There had been a dearth of backhaul cargoes, usually used by owners and operators as a journey to reposition their ships from the Pacific to the Atlantic region.
Typically, panamax vessels would take a cargo of coal from Indonesia or Australia to Europe and, once they had discharged, seek further work in the Baltic Sea, South America or the US Gulf regions.
But with little backhaul work, panamax bulk carriers remained in the Pacific and were in short supply in the Atlantic, quickly driving rates higher.
That saw vessels chartered from the Pacific region and ballasted to Atlantic ports to load, pushing up rates there as well.
Baltic Exchange transatlantic rates had more than doubled in two weeks, from US$12,591 per day, to close at US$24,788.
A transatlantic rate covers a ship booked from Skaw Passero for a voyage of 45-60 days, typically to the South American east coast, and return.
“We’ve got a bit of unexpected demand right now, a rally that is broadly unexpected,” Steve Rodley from London-based panamax operator and shipping hedge fund M2M said.
“It takes a brave man to give an opinion in this market. Everybody is saying: ‘is it sustainable?’
“People are nervous and worried, just like in the equities market and the wider economy in general,” said Mr Rodley, whose company controls 40-50 ships.
More than 16 panamax period deals were reported to the Baltic Exchange in the middle of May including a handful for periods of 12 months.
Paper trading provides a further insight into trading expectations. At the same time, third-quarter panamax contracts traded at US$15,000 per day, considerably lower than the Baltic Exchange’s average time charter rate of US$19,783 per day.