Handymax rate begins to decline

The dry bulk freight rates have began to decline in recent months following the completion of tens of new freight ships at Chinese shipbuilding companies, and the price trend will likely to continue until the end of this year, Bisnis Indonesia reported Tuesday.

Djoni Sutji, an executive of the National Shipowners Association (INSA), said in Jakarta on Monday that the downward trend in the freight rate would likely continue until the end of this year as more large cargo ships would be launched from the Chinese ship building companies.

Besides the increase in the number of new cargo ships, the decline in the freight rates was also caused by the drop in the shipment of coal in the world, he said.

The rate of a Handymax ship with dead weight capacity of 53,000 tons plummeted by 25.92 percent to US$20,000 per day during the first week of this month from about $27,000 in June, 2010.

He said that the rate of renting a Panamax ship with a capacity of 75,000 tons also declined to $25,000 a day (for one-year booking) in the first week of this month from $27,500 a day in early June. (*)