Global higher freight impacts clinker importers as CFR values edge higher

Higher freight rates and unavailability of ships impacted clinker buying decisions as buyers faced higher CFR costs, leading to hesitancy to commit to new cargoes, multiple sources told Platts July 17.

While some sources blamed the higher freight on the ongoing geopolitical tensions in some regions, shipbroker sources said freight rates had firmed up in recent weeks due to an increasing number of ships being used in the transportation of grains in the Americas regions, which was impacting global freight rates.

"Very good grain demand is pushing Atlantic freight up," a shipbroker source told Platts, part of S&P Global Energy. "I don't think the uptrend will just turn yet."

Trader sources said freight was impacting buyers' appetite, especially for smaller intakes of up to 40,000 mt.

"With the current freight rates, clinker CFR West Africa is coming to more than $65/mt from the Med suppliers, up from $60/mt two weeks back, and not every receiver is looking to pay that price. Added to that, the port congestion and rainy season are also increasing the risk of demurrage, so the market is stuck, everyone is waiting," a trader source said. "Those who have fixed deals are suffering because of the freight increase and also finding it difficult to get the right vessel on time."

In Asia, sources said, suppliers in Vietnam and China had lowered FOB values to compensate for the higher freight rates, but "the market was very tight."

Indicative freight rates from Vietnam-Bangladesh for 50,000 mt were at $14-$15/mt.

Platts Cement Med-Houston freight (40kt) was assessed at $29/mt up on July 17 from $24/mt in the previous week.