London — Freight rates to carry a 60,000 mt grain cargo from Santos, Brazil to Qingdao, China on a Panamax-size vessel have weakened to a six-month low of $33.75/mt on the back of declining fresh grain stems on the market and increasing tonnage in the region.
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Since hitting an all-time high of $40.75/mt on October 16, rates have dropped by 17% to $33.75/mt, S&P Global Platts data shows.
As exports of Brazilian grains declined throughout the month of November, ill-timed ballasting of ships from Asia-Pacific towards South America has increased vessel capacity substantially without being met by enough corresponding cargo.
Market participants have also blamed the exceptional trade situation between the US and China as grain exports from the US Gulf Coast that would normally absorb the excess capacity of tonnage to export to China have not been able to do so following the hefty tariffs on grains imposed by Beijing.
"December is expected to be even softer," according to one shipowner source.
The Santos-Qingdao freight rate for a dry bulk Panamax vessel in the Atlantic was assessed at $33.75/mt on Thursday, down $0.50/mt from Wednesday's assessment of $40.25/mt.
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