Freight rates slightly higher on Chinese port congestions

Freight rates for dry bulk commodities lifted for the second consecutive week in most routes monitored by Agricensus, supported by ongoing port congestion in China and higher fuel costs.

Congestion at Chinese ports remains a key element tightening global freight markets with large port stocks creating bottlenecks and vessel queues.

“The increase in freights is still due to port congestions as high stocks on Chinese ports continued to rise over the week,” a Chinese freight trader told Agricensus.

Logistical bottlenecks at Chinese ports are still linked to Typhoon Chanthu that hit the Chinese coast on September 13.

“After the typhoon, congestion has returned in China across all four vessel sectors; capesize, panamax, supramax and handymax,” another freight trader said.

Congestion is also underpinned by recent Covid outbreaks, according to trade sources, with enhanced quarantine measures causing additional delays.

“Port operations are probably impacted by the recent Covid outbreak at Putian ports,” the Chinese trader said.

The port city of Putian, with nearly 2 million inhabitants, has been in lockdown since September 10 due to one of the most severe Covid outbreaks reported in China recently.

Besides port congestions, fuel costs trended higher over the past week, contributing to buoy the freight market.

Freight costs for most routes monitored by Agricensus increased mildly over the week with panamax rates between US Pacific Northwest ports and China up 33 c/mt to $44.56/mt and those for shipments from southeastern Brazil to China up 29 c/mt to $66.62/mt.

Panamax rates from US Gulf ports to China were broadly steady on the week at $81.18/mt as operations progressively resume following Hurricane Ida-related disruptions.

Cargoes crossing the Atlantic from the Americas to Europe lifted 10-14 c/mt on the week with panamax routes from Brazil and the US Gulf to the Netherlands assessed at $22.37/mt and $32.10/mt, respectively.

In the Black Sea region, panamax freight rates for cargoes heading to China lifted 28 c/mt to $65.18/mt while vessels crossing the Mediterranean to North Africa were heard at $35.00/mt, up by $2.46/mt on the week as North African demand has been robust.