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Quake casts cloud over freight market

Asian panamax rates for dry bulk cargoes are seen mixed this week, with India's devastating earthquake weighing on chances of a pickup in vessel demand after the Lunar New Year holiday, shipbrokers said on Tuesday.

The massive earthquake in western Gujarat state on Friday, which measured 7.9 on the Richter scale, has also wrought havoc in Kandla port. Jetty and warehousing operations in the country's busiest port have been disrupted.

"The Indian earthquake will be negative for the freight market because of expectations of a temporary decline in the country's imports and exports," said a Seoul broker.

The freight market had initially believed that freight rates would rise this week on expectations of a pickup in vessel demand for grain shipment after the Chinese New Year holiday, he said.

"We heard that four jetties in Kandla have been damaged. But we know nothing for sure because of lack of information from there. We are still unable to contact our agent there," he said

Kandla handles 17 per cent of the cargo passing through India's 12 largest ports such as petroleum products, crude oil as well as chemicals and agricultural commodities such as cooking oil and soyameal. It serves the hinterland of western, central and northern India.

Information from Kandla was still sketchy because of communications and power problems.

But another trader said that the Indian earthquake would not have much impact on the Asian freight market because major regional importers can secure grains and oilseed from other sources such as the United States or South America.

Panamax rates for the US Gulf to Japan were indicated at $23 a tonne for late February/early March shipment, unchanged from a week ago as there were few fixtures due to the holiday, he said.

The broker also put indication rates for late March/early April shipment at around $23. But no fixtures have been reported.

In the market, one Japanese trading house was said to be seeking a panamax vessel at $22.50 a tonne to carry about 54,000 tonnes of heavy grain from the US Gulf to Japan for late February/early March shipment, a third broker said.

The deal by the trade house is expected to be fixed at $22.75 a tonne and would set a benchmark for freight rates this week, he said.

Freight rates to South Korea and Taiwan were about $1, a tonne less than those for US Gulf/Japan, reflecting higher port charges in Japan, brokers said.

Timecharter rates for the US Gulf to Japan were unchanged from last week at $11,000 a day plus $230,000 ballast bonus, a broker in Tokyo said.

Timecharter rates for the Pacific round for modern Panamax vessels were at $13,250-$13,500 a day, against $13,500 early last week, he said.

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