Panamax operators are eager to fix in tonnage as the period market tries to catch up with a peaking spot market, which is near a three-year high.
Some owners and operators are feeling the sting of being left behind by the formerly sluggish market.
Chartering brokers say one Japanese kamsarmax newbuilding has been fixed this week straight out of the yard at $16,000 per day for 12 months by an international charterer.
Improvement jump
That represents a significant week-on-week jump as the previously lacklustre segment continues to improve, despite a loaded orderbook.
Another one year deal at a lower rate, the charter of the Kwang Ming-controlled 80,000-dwt KM Shanghai (built 2014) at $14,500 per day, has puzzled brokers as it follows a series of deals in the low to mid-$15,000 range in a generally upward period market.
At the end of last week, Primerose Shipping's 82,000-dwt Ocean Saga (built 2015) had already attained $16,000 per day, but for the shorter term of five to eight months.
All period tonnage that was taken in the last year is trading very profitably now
Shanghai broker
In what brokers describe as a second tier of tonnage, a smaller, older, Chinese-built panamax, Olive Shipmanagement's 79,600-dwt Elinda Mare (built 2010) brought some $14,000 per day for a charter of seven to nine months.
Caught long
Earlier, brokers say Denmark's Norden was caught long on cargo when it fixed in the Chengxi-built, 81,100-dwt JY Hongkong (built 2019) for seven to nine months at a rate of $15,400 per day. The same owner may be expected to be on the lookout for similar deals. A Norden official declined to comment.
"All period tonnage that was taken in the last year is trading very profitably now," said a Shanghai broker who named Oldendorff and Klaveness as players that had acted in time to catch the wave. "Norden is one that was caught by surprise."
"But the market is generally firming and will keep on as long as you can do period deals at a discount to spot," the Shanghai broker said.
"Looking at the FFA curve, $16,000 per day for the next year's trading would be worth it," said one Shanghai-based panamax specialist with a major owner who believes that long-haul grain cargoes to the Far East is the key cargo in the mix.
Grain is key cargo
"Coal cargoes to China from Australia and Indonesia are just stable now, but with China sourcing grain from the East Coast of South America [ECSA], that long route will be pushing the market up."
Coal cargoes to China from Australia and Indonesia are just stable now, but with China sourcing grain from the East Coast of South America, that long route will be pushing the market up
Shanghai broker
In the Pacific spot market, kamsarmaxes are fixing at some $18,000 per day in gross terms and close to $20,000 per day for ECSA load ports with delivery in the Singapore to India range.
"We could see some corrections in the spot market this week. The rates may have jumped too fast, and macro-factors have been pulling down several markets, but, in general, the panamax and kamsarmax market remains hot," the same Shanghai-based source said.
VesselsValue lists about 250 panamaxes on order, all but two of them are of kamsarmax carrying capacity. The total includes 75 kamsarmaxes on order for delivery before the end of the year, of which 17 have been launched in Japan and most of the others in China.
But owners seem undaunted by the orderbook.
Trade war
One of the drivers behind the firm spot market is the US-China trade war, which has added tonne-miles to the grain trades by moving the republic's grain and soybean sourcing from the US Gulf to Brazil and Argentina.
Among the beneficiaries of the trade war is Foremost Maritime, the shipowning arm of the New York-based Chao family with its deep connections to the current US administration.
Speculative owners are looking like winners if the segment remains bullish, as kamsarmaxes have been one of the most popular financial investment plays in dry bulk.
The newly delivered JY Hongkong is part of a large series on order at the Chinese state-owned yard for Bank of Communications Financial Leasing, and compatriot leasing houses including AVIC International Leasing, ICBC Leasing and China Development Bank Leasing are understood to have unchartered tonnage on order in the segment. AVIC alone has a reported 12 kamsarmaxes on order.
Owners flocking
But traditional owners have also flocked to the space. Taiwan's Ta-Ho Maritime, Taiwan Maritime Transport, U Ming Marime Transport and Wisdom Marine are all awaiting deliveries.
So are Germany's Oldendorff and traditional Greek owners such as Aegean Shipping, Angelakos, Chartworld, and Laskaridis-controlled Lavinia.
John Fredriksen's Seatankers, with 11 panamaxes and kamsarmaxes on the water, has five more set for delivery this year and three more in 2020.
