Dry bulk rates across segments have increased over the past week as congestion at ports in China remains stubbornly high, with logjams at northern ports and terminals, as well as off Shanghai and Ningbo. Adding to lengthening delays to discharges in China were the temporary closure of Caofeidian and Jingjiang ports due to strong winds on December 6. Bad weather also reportedly shut some Australian ports in the past week.

The average weighted capesize time-charter was at $41,324 per day at the close on the Baltic Exchange. That is 11% higher than a week ago and is the most since October 26. Panamaxes gained 16% to $29,275 per day from a week ago. That is the highest level since November 3. “Tonnage appeared tight in both basins,” the London-based Baltic said in a weekly report of the capesize market. For panamaxes, the Atlantic basin “saw both a mineral and grain-led charge, pitted against a tight tonnage count from the Continent and Mediterranean”. Solid levels of demand were also reported from the east coast of South America.

There are 262 bulkers and ore carriers of 10,000 dwt and over totaling 20.2m dwt at anchor outside ports waiting to discharge at coal, grain, minerals and ore terminals in northern China, according to Lloyd’s List Intelligence data compiled by Lloyd’s List. These include the Huanghua bulk and grain terminals, Caofeidian, Tianjin, Tangshan, Jingjiang, Qinhuangdao, Jinzhou, Bayuquan and Yingkou terminals. That number compares with 265 ships, totaling 20.7m dwt, measured on October 22, the data shows.

Congestion remains off Shanghai and Ningbo, where there are 181 vessels of 12.7m dwt. That is lower than the 244 ships at anchor seven weeks ago. This area covers ports at Zhoushan, Majishan, Dafeng and Baosteel terminals. The lengthy delays reflect tighter immigration and quarantine policies in China, with two-week waiting periods before vessels can call at ports in line with the zero-Covid policy.

Congestion earlier in 2021 was attributed to strengthening demand for iron ore, coal, and grains, with shipments arriving outpacing terminals’ ability to handle them. But with lower manufacturing and steel output, queues today reflect delays linked to pandemic restrictions.

Breakwave Advisors said it expected the next few weeks to remain “relatively strong,” although a natural correction was likely, given the fact that cargo flows seasonally decline in the first quarter. This is priced into the futures market, with the capesize contract for the first quarter trading at about 50% below spot levels, the US-based consultant said. “The question is whether such correction will be deep enough to actually push futures even lower, and this is very difficult to predict,” it said in a note on December 7.

“However, this time around, there is an unusual circumstance that we believe is important when it comes to future rates, namely the inter-asset relationship between large vessels and small vessels. At present, smaller vessels are expected to earn more versus the larger capesize ships soon, a very unusual occurrence. Although there are valid reasons for that, we believe that such an environment will naturally provide some support for capesizes and thus we think a major correction is a low probability event.”

In the supramax and ultramax market, increased activity was seen from the US Gulf and South America, which led to tonnage tightening for prompt dates, according to the Baltic Exchange. Supras crept up 6.3% to $27,367 per day, while handysizes rose steadily to $28,224 per day, gain of 1.5% from November 30.