Eastbound transatlantic shipping rates move down

07 November 2008 18:22  [Source: ICIS news]

By Lane Kelley and Dan Horlock

HOUSTON/LONDON (ICIS news)--Transatlantic spot freight rates on the eastbound lanes moved lower due to inactivity, brokers said on Friday.

Freight rates on the eastbound route for 2,000 and 5,000 tonne easy chemical cargoes were $64-67/tonne (€51-53/tonne) and $42-47/tonne respectively, according to sources.

European sources confirmed a 5,000 tonne biodiesel cargo that settled in the mid $40s/tonne.

One broker said the lack of cargoes from the US to Europe made setting rates mainly a guessing game.

“Eastbound freight rates have really fallen away over the past couple of weeks with a severe lack of demand the root cause of the decreases,” one broker said.

“Even with owners offering significant price cuts, there are very few takers out there at the moment,” another broker said.

Westbound, levels were stable with 2,000 tonne shipments at $72-75/tonne and 5,000 tonnes at $59-64/tonne. Players were still reporting a difficult market with owners reluctant to reduce freight rates.

“I have a few owners that are interested in working westbound cargoes for December. However, they are unwilling to move much on price as it will open the floodgates for lower rates,” one broker said.

One trader indicated that westbound freight rates could not remain at such high levels because the market would grind to a halt.

“As bunker fuel costs drop off, owners must begin to negotiate. Otherwise the market will remain stagnant,” the source said.

One owner was adamant that the westbound freight rates were accurate and that owners were recouping losses from earlier in the year when bunker fuels were at record levels.

“We will not be bullied into accepting less when only now we are beginning to recoup our losses,” the source said.

($1 = €0.79)

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By: Lane Kelley
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