The market for midsize bulkers is remaining elevated as vessels forego the congested Panama Canal for much longer routes to their destinations, brokers said.
The average spot rate for panamaxes reached $13,400 per day on Tuesday as the Baltic Exchange’s Panamax 5TC basket gained 2.8% in a day. This is up from just above $8,000 per day in late July.
Meanwhile, the average spot rate for supramaxes exceeded $10,000 per day for the first time since late May. The Supramax 7TC edged up 1.1% on Tuesday to achieve $10,100 per day.
Brokers and analysts have pointed to vessel backups at the drought-stricken canal for weeks as the main reason for the higher spot rates, but now they say the longer trips are keeping them aloft as the congestion wanes.
“Reduced queues imply the longer voyages for vessels avoiding Panama are forming the main (and difficult to quantify) fleet inefficiency associated with chronic low water levels in the canal,” UK-based shipbroker Braemar said in a note on Tuesday.
The number of vessels waiting to cross the canal, which has a 12-metre draught limit for panamaxes, has gradually fallen to 123 ships on Tuesday from 135 vessels on 19 August, according to Leth Agencies.
The average waiting time for bulkers to cross the canal has grown to 11 or 12 days this month from three to four days a year earlier, Braemar said.
Longer wait times and higher grain chartering activity from East Coast South America have indeed boosted the supramax and panamax sectors, but longer voyages have become the main reason for their continued buoyancy, the broker said.
“Efforts by Panama Canal authorities have limited bulker vessel queues, but are contributing to longer-haul voyages avoiding Panama.”
Gatun Lake, which supplies the locks with the water needed to lift ships, is currently at a depth of 24.3 metres, down from the five-year August average of 26 metres.
The Panama Canal Authority does not expect the lake’s depth to return to 27.4 metres until late October.
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