Vessel owners shun India as lack of return cargoes weigh: sources

Vessel owners are seeking a premium payment to fix their vessels to India as a lack of back-haul cargoes is making the destination unattractive, sources said Thursday.

"The problem is to find owners to go to India but nobody wants to go there," a Singapore-based ship broker said.

Vessel owners are reluctant to head to the west coast of India, a Dubai-based broker said, adding that Supramax freight rates from South Kalimantan to the west coast of India, for example, had surpassed $16/mt.

"Spot stems have already been booked by most operators. However, I do not see many cargoes with forward dates because with such high freight rates, traders or shippers won't be able to sell," he said.

He estimated Supramax freight rates from South Kalimantan to the east coast of India at about $14.25/mt.

Some vessel owners are seeking a premium of about $25,000 to go to the west coast of India, an India-based broker said.

Several Panamax vessels are still ballasting to the US Gulf to pick up grain cargoes, which has absorbed plenty of tonnage from the market, sources said.

"A lot of vessels are en route ballasting to US Gulf. Typhoons and Capesize splits are helping. So more tonnage is taken out of the water," the Singapore-based broker said, adding that he expected freight rates to remain stable in the near term.

Due to higher freight rates for Capesizes, some charterers were splitting the Capesize stem into two Panamaxes to save costs, sources said.

SPREAD WIDENS

However, the India-based broker said the spread between the owner-charterer rates has widenend to nearly $2/mt from $1.50/mt last week.

He said Supramax vessel owners were quoting about $20,000/day while charterers were at $14-15,000/day.

From South Kalimantan to east coast India, charterers were quoting $13.50/mt while owners were asking as much as $15/mt, he said.

From South Africa's Richards Bay to India, Capesize vessel owners are quoting $19-20/mt, while charterers are asking about $16/mt, he said, adding that he was seeing some enquiries on this route.

Gearless Panamax vessel owners were asking about $13/mt from South Kalimantan to the east coast of India, while charterers were at $11/mt, he said. Gearless vessels do not have loading-discharging equipment fitted.

"Rates for Panamaxes kept firming as fixing activity increased in both basins for another week," Greek shipbroker Intermodal said in its weekly note Tuesday.

The time-charter market for Panamaxes has also improved further, with the average rate now surpassing $15,000/day, the broker said.

"After the Chinese came back from holidays we saw more demand, especially in the Pacific basin where Panamaxes now get around $19,000/day for round trips; this is up $2,000-3,000/day over the last week," broker Fearnleys said in its weekly note Wednesday.

"The Atlantic market is somewhat more quiet, but the demand is strong and tonnage lists short, so rates keeps pushing up."

Platts Thursday assessed the Panamax coal freight rates from South Kalimantan to India's east coast at $19.60/mt and to the west coast at $19/mt, both unchanged on the day.

Platts also assessed the Panamax coal freight rates from South Africa's Richards Bay to India's east coast at $12.50/mt and to the west coast at $14/mt, both unchanged on the day.
Source: Platts