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...

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.

What to read next
Feedback was received during the consultation period of an immaterial nature that would not impact the result of price assessments. Therefore, while no material changes will be made to the methodologies at this stage, clarification indicating that the Effective List price treats changes in annually established discounts during the year as changes in the price. […]
Fastmarkets is inviting feedback from the industry on the pricing methodology for European Packaging Paper and Board as part of its announced annual methodology review process. This consultation, which is open until August 31, 2024 seeks to ensure that our methodologies continue to reflect the physical market under indexation, in compliance with the International Organization […]
Amid a market downturn, suppliers reconsider proposed price increases for pulp in China, revealing the complexities of the import pulp market
In the open consultation, Fastmarkets FOEX did not propose any changes, and there was no feedback received during the process. No material changes were made to the current methodology. A newly dated methodology document has been posted here.
The publication of Fastmarkets’ aluminium scrap and secondary aluminium ingot price assessments for Wednesday June 12 were delayed because of a reporter error. Fastmarkets’ pricing database has been updated.
How could the EUDR could reshape the future of the pulp and paper industry? In our recent Viewpoint article by European packaging director Alejandro Mata Lopez we explore the potential challenges and opportunities for the market and global trade