Charter rates for post-panamax vessels are edging down as the winter low season kicks in. Still, market sentiment remains fairly strong.
The charter market is ticking along in a fairly steady fashion as the end of the year approaches. The last[ds_preview] couple of weeks saw a sideways rate trend in many size classes, with only smaller post-panamaxes and wide-beam vessels suffering a decline whereas geared 2,500 TEU vessels achieved some gains. Accordingly, the Howe Robinson Containership Index, which covers all size class up to 8,500 TEU, nudged down by around 2.0% over the past four weeks while the New ConTex with its limited coverage of the 1,100-4,250 TEU segments is basically unchanged.
Firm demand for large gearless vessels (classic post-panamaxes) is reported to have ebbed away for now as container lines are focused on maximising the utilisation of their own tonnage as cargo flows slow down after the peak season. The impact on market rates has been limited, though, due to the fact that some sub-segments such as 8,500 TEU do not see any ships in spot position at all. Hence, market levels do not get tested.
For modern wide-beam vessels (3,800-5,400 TEU) and for smaller post-panamaxes in the 5,500-6,500 TEU range it has been a different story. Spot requirements for ships coming off charter are hard to come by these days, forcing rates down by several thousand dollars in some cases, brokers reported. 6,500 TEU class vessels saw fixing levels pushed down to 21,000 $/day. Come end of November, assessements are down to around 23,700 $/day (6,500 TEU) and 18,900 $ day (5,700 TEU), respectively – a decline of 10-15%. For wide-beam vessels, the falls were even sharper. Some weeks earlier in September, rates had peaked at well over 20,000 $.
The slowdown in demand for larger tonnage is a common feature of the market during the fourth quarter when the seasonal weakness in cargo volumes forces carriers to offload tonnage. However, some brokers point to a silver lining on the horizon, suggesting that appetite for larger charter vessels might be back sooner than expected. There are two reasons cited.
First of all, with an early Chinese New Year this time in late January, the slack cargo season might be shorter than in other years. Secondly, the widely reported delays on scrubber installations on existing ships might force carriers to look for replacements, at least for short durations.
Developments in the segments from panamax down to feeder class ships were more stable. Baby panamax vessels even managed to recoup some losses and bring rates up again to 14,000 $ in Asia on a steady flow of fixtures. Gearless 3,500 TEU vessels showed a similar rate trajectory.
In the 2,500-2,800 TEU sub-panamax sectors, there were diverging trends, with gearless 2,700/2,800 TEU ships faced with a slowdown in business and stagnant rates of 10,500-11,000 $/day in Asia. By contrast, demand for geared 2,500 TEU gained further momentum, lifting rate levels into five-digit territory in all regions. Remarkable increases were seen in the Atlantic and the Mediterranean where benchmarks for standard vessels rose into the 10,000-10,500 $/day range – up from 8,500-9,000 $ a few weeks before.
For ships in the feeder classes below 2,000 TEU, chartering activity is reported to have intensified in some sectors (especially around 1,700 TEU). However, rate levels were stagnating as illustrated by unchanged assessments month-on-month for 1,700 and for 1,100 TEU ships in the ConTex.
Michael Hollmann
