Charterers are locking in panamax bulk carriers on period charters as rates rise in the spot market, hitting a new 11-year high on Tuesday. On Monday, two Kamsarmaxes and two Panamaxes were reported fixed on period contracts of less than a year’s duration. Panamax freight rates saw another big rise on Tuesday, bringing the spot market to the highest level since 2010.

Jeremy Palin, a panamax specialist and chief executive of Arrow Shipbroking Group, told TradeWinds the rising spot rates are “a matter of pure fundamentals. Consistently robust demand from all Atlantic origins, coupled with congestion and logistics issues in the Far East, have led to a continued supply squeeze in the Atlantic,” he said. Research by Arrow estimates that around 16% of the panamax fleet is being affected by congestion. “These inefficiencies mean that Kamsarmaxes open in Asia are regularly fixing Atlantic loading, stretching the tonne-mile equation further and driving Kamsarmax spot rates higher,” Palin said.

Baltic Exchange panelists assessed the panamax 5TC, the weighted-average spot rate for five key routes, $1,640 higher at $36,087 per day on Tuesday. This is the highest level since May 2010, based on the basket assessment’s old methodology. Market participants are fixing vessels on period deals and taking coverage in the freight forward agreement (FFA) market to hedge against further rises in the physical market this year, Palin said. “The FFA market remains in a reasonably steep carry for Q3 and appears reasonably well supported both for Q4 and Q1, giving short to medium period bidders confidence that covering spot requirements now with period vessels is both the most economic form of spot execution, and has a back end that is hedgeable at today’s levels,” Palin said. He added that much of the selling interest being seen for contracts for the fourth quarter (Q4) this year and the first quarter 2022 is just “a function of this hedging activity, and not necessarily an indication of sentiment”.

“The same is true of the supramax/ultramax market, further underpinning support in the Kamsarmax market and, of course, owners’ resolve,” Palin added. Third-quarter contracts for Panamaxes changed hands at above $36,500 per day during the day’s trading on Tuesday and paper for the final quarter of 2021 traded as high as $30,600 per day. Prices, however, cooled off a little on Tuesday afternoon in London. But these numbers come in marked contrast to FFAs for the first quarter of 2022, which flirted with the $21,000-per-day mark during trading on Tuesday. Similarly, paper for 2022 (CAL22) hovered at around $20,000 per day.

On Monday, Speed Logistics Marine reportedly booked a panamax for five to seven months at $32,000 per day, plus a $1.25m ballast bonus. The Hong Kong-registered charter operator, which is backed by Lebanese nationals Fredric and Daniel Karam, has reportedly hired Axis Bulk Carriers’ 79,516-dwt Irene Madias (built 2021), which will deliver at the Romanian port of Constanza after 5 July. Oldendorff Carriers, the world’s biggest bulker operator, has meanwhile booked the 82,057-dwt Nireas (built 2012) for five to seven months at $32,500 per day. The Kamsarmax, which is owned by Laskaridis Shipping of Greece, will deliver this week at Rotterdam in the Netherlands and will redeliver in the Atlantic.

Meanwhile, Hyundai Glovis has reportedly relet the 83,688-dwt Kamsarmax Kavala (built 2009) to commodities trader Louis Dreyfus for two laden legs at $30,000 per day. The period will commence during the first few days of July and will run until 8 September or 8 October at the latest, redelivering in the India/Japan region. The Kavala will deliver at Linkou in Taiwan, where it has just completed a spot voyage with coal for the country’s Taho Maritime Corp, which was paying a daily rate of $27,000, according to fixtures data. The daily rate that Glovis is paying for the vessel has not been reported publicly.

Finally, Hong Kong-based operator Smart Gain Shipping has reportedly fixed Kuang Ming Shipping Corp’s 80,545-dwt KM Shanghai (built 2014) for a year at $28,500 per day. The panamax will deliver to the charterer at Nadahama, Japan in early to mid-July. Another year-long period deal was reported on Tuesday. Cofco Agri was said to have hired MX Bulk Management’s 82,300-dwt Ursula Manx (built 2021) for 11 to 13 months at $29,500 per day. The brand-new ship was launched this month from China’s Tsuneishi Zhoushan shipyard, where it will deliver to the charterer in mid-August.