Peaking Chinese demand for iron ore, easing port congestion in Australia and a rising supply of ships are capping benchmark Asian shipping rates, regional brokers said on Tuesday. Spot voyage rates for modern panamax vessels for the benchmark US Gulf to Japan route were assessed at around $50 a tonne or a little under $50, compared with $51-$53 a week earlier, they said.
"A year ago, panamax and capsize markets rose one after another but now the situation is opposite as they are falling one after another," a Seoul-based broker said.
Steel industry sources said this week that mills in China - the world's top steel producer - are deferring shipments of iron ore as profits are squeezed by overcapacity, Beijing's fresh measures to cool the economy and a sluggish global economy.
Sharp falls in local Chinese steel product prices have prompted mills in China to delay term shipments of iron ore from Brazil and Australia.
"I think Chinese iron ore demand has peaked for the time being," a Japanese broker said. He said the shipping market's rise had been driven by capsize vessels, and waning demand for iron ore would now weigh on the whole market.
FREIGHT FALLS: Many brokers think the heyday of the freight markets is over, with an increasing supply of ships and improving conditions at congested ports, such as in Australia.
One official at a Japanese shipping firm said freight rates were unlikely to go over $50 this week.
In the period market, timecharter rates for the US Gulf to Japan were estimated at roughly $33,000 a day, down a touch from last week's high of $35,000.
In the Pacific market, TC rates were assessed steady at $19,000-$20,000 a day compared to $18,000-$19,000 a week earlier.
Capsize vessels carry more than 100,000 tonnes, and are predominantly used to carry iron ore and coal.
Panamax vessels are associated with hauling grains and other products and carry 55,000-80,000 tonnes of goods.
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