USG Supramax demand still lower than expected

The US Gulf (USG) Supramax freight market remained relatively quiet over the month, although market participants expected firmer rates for September laycans.

Transatlantic voyages remained the preferred business, as fronthaul pricing remained challenging due to the Panama Canal restrictions, with daily transits reduced from 36 vessels to 34 due to low water levels in two artificial lakes that feed the canal. The number of ships permitted for the canal transit will drop to 32 going forward.

Freight rates for transportation of a Supramax-lot of petcoke from Houston to ARA ports with spot laycans are at US$30/t on average. Deals for delivery of 50,000t of petcoke from Houston to Iskenderun with spot laycans are being discussed at around US$39/t on average. Shipping costs for delivery of a Supramax-lot of petcoke from USG to EC India are at US$61/t on average. 

The USG Supramax freight market is expected to gradually pick up, particularly on transatlantic routes, as US grain exports gain momentum. 

The reduction in transit limits through the Panama Canal may further reduce the effective vessel supply given an increase in the average trip duration.

By Brannvoll ApS, Denmark