Increase in Container Ship Freight Rates Amid Capacity Shortages and Trade Tensions
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Sea News – International Service – Based on the Baltic Exchange Index The maritime transport market witnessed significant fluctuations last week. Large bulk carriers (Capesize), typically used for transporting coal and iron ore, experienced strong growth. In contrast, medium-sized bulk carriers (Panamax), which mainly transport grain and minerals, saw a decline in freight rates. Additionally, the tanker sector, responsible for crude oil transportation, faced a weak week, with freight rates dropping.
Increase in Freight Rates for Large Bulk Carriers (Capesize)
Over the past week, demand for coal and iron ore transportation, particularly on routes from Australia to China and Brazil to Asia, increased. As a result, Capesize freight rates rose significantly:
The Australia–China route increased from $6.65 to $9.88 per ton.
The Brazil–China route rose from $18.31 to $19.87 per ton.
Decline in Panamax Freight Rates
On the other hand, Panamax vessels, commonly used for grain and mineral transport across the Atlantic and Pacific Oceans, faced challenging market conditions. A decrease in mineral shipments from South America and Africa contributed to falling freight rates:
On the Transatlantic route (Europe–America), rates dropped to approximately $14,000 per day.
In the Pacific Ocean, lower demand led to further rate reductions.
Smaller Bulk Carrier Market: Relative Stability but Slower Growth
In the medium and smaller bulk carrier segment (Ultramax/Supramax/Handysize), which transports diverse cargo such as cement, fertilizers, and steel, no dramatic changes were observed:
Rates remained high in the Gulf of Mexico.
The Mediterranean and South America markets showed a downward trend.
Asia started the week positively but saw a decline towards the end.
Drop in Tanker Freight Rates
Tanker owners faced a challenging week as freight rates on key routes fell due to weaker-than-expected crude oil transportation demand:
Very Large Crude Carriers (VLCCs) on the Middle East–China route saw rates decline from WS63 to WS58.
Suezmax tankers, transporting crude from Nigeria to Europe, dropped six points, reaching WS85.
Aframax tankers, operating on shorter routes such as the Mediterranean and Northern Europe, also experienced declining rates.
Conclusion
Last week, the Capesize market benefited from rising demand, while Panamax bulk carriers and tankers faced falling freight rates. If this trend continues, it could have a significant impact on global transportation costs.
