Ship operators bullish for Supramax freight rates in Northwest Europe

Supramax freight rates in the UK Continent and Baltic are expected to tick higher in coming weeks, ship operator sources said, after scrap charterers were seen Monday circulating cargo requirements for mid-December dates.

With scrap charterers typically fixing stems 1-2 weeks out, their interest in mid-December dates indicates they expect freight rates to recover and are trying to lock in cheap prices now, sources said, after levels plummeted in recent weeks due to low cargo availability.

A lack of scrap and fertilizer cargoes saw freight rates in the region collapse since mid-October, with TCT rates dipping from as high as $18,000/d for scrap trips from the UK Continent to the East Mediterranean to the $13,000-$14,000/d range, while the Rotterdam to Aliaga scrap route basis 40,000 mt shed $2.50/mt over the same period to $16/mt on Monday.

Booming freight rates in the US East Coast and Gulf Coast have lent support to this notion, as tight tonnage in both regions has provided vessels open in the UK Continent with ballasting opportunities for early December dates.