Panamax dry bulk rates staged a mild recovery this week after having fallen to less than half the record high set earlier this year, as Chinese appetite for raw material returned, shipping sources said on Tuesday.
Modern panamax rates for the benchmark US Gulf to Japan route were at about $37-$38 a tonne on Tuesday, after dropping to around $35-36 late last week, Japanese shipping sources said.
One Seoul broker quoted the US Gulf-Japan rates as high as $43.
This compares with about $37-$40 a week earlier, and record highs of $75-$80 marked in February-March this year.
"Rates rebounded as fresh orders from China emerged," said an official with a Japanese shipping firm.
He added orders were made for Brazilian and Argentine soybeans, as well as for Indian iron ore.
"With Chinese demand returning to the market, I don't expect freight rates to fall further from the current levels," he said.
An official with a different Japanese shipping firm also said there had been a deal to ship iron ore from India to China, although he was unaware of fresh Chinese orders for South American soy.
"The market has rebounded moderately in recent days. But I'm still not sure if the market has bottomed out and turned to an upward trend," the second official said.
The latest Chinese moves signal that China may be ending its adjustment of commodity stockpiles, which have been accumulated aggressively since late last year, and may place more fresh orders for minerals and grains in coming weeks, officials said.
Seoul brokers said on Tuesday panamax rates edged up this week on a technical correction after recent sharp falls, and that rates were also buoyed by rises in the capesize markets.
One broker said active Japanese demand for iron ore and coal for electricity was boosting the freight markets.
Freight rates started to fall from mid-April after China, the main force that drove freight rates to record highs, began implementing measures to rein in its roaring economy, causing a slowdown in its imports of minerals and grains.
China's recent rejection of some cargoes of Brazilian soybeans also weighed on the freight market.
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