Bitumen container freight rates from Iran slump

Freight rates for bitumen containers have slumped by around $15/t over the two past weeks from Iran's Bandar Abbas to west coast Indian ports, according to Middle East and Indian market participants, on the back of increased availability.

"Availability of containers have increased at the Bandar Abbas [port]," said a participant, added that shipping companies are trying to save costs by importing rice in these container vessels on their return journey from India.

The availability of bitumen containers has also risen on the back of reduced demand from the Indian market since June this year. The start of the monsoon season resulted in the weaker demand from India, which is the largest importer of bitumen from the Middle East.

Despite the overall strength in bunker fuel costs, container freight rates have fallen by about 50pc since mid-May from Iran to India. Argus assessed freight rates from Bandar Abbas to Mundra/Nhava Sheva lower by $26/t in the past four months from $52.50/t to around $26.50/t for the week ended 9 September.

"Freight went up due to logistic issues and vessels moving [more] to South China Sea. But, globally, ocean freight rates [for containers] is coming down," an Indian importer said, suggesting that the current fall is an expected downwards correction in the market.

The drop in container freight rates come on expectations of robust post-monsoon demand in India from the end of September or early October. There are expectations of increased traded volumes for Middle East-origin drummed cargoes in the past few weeks.

Iranian shipping services IRISL and Nvoccs offered freight rates for 20ft containers as low as $400-420/container ($20-21/t) last week.

Argus assessed weekly drummed bitumen prices at $408.50/t on a fob basis for the week ended 9 September.

By Maedeh Mazinani and Sathya Narayanan