Freight rates for large capesize dry cargo ships on key Asian routes are likely to remain steady next week even as owners try to push rates up close to year-highs, ship brokers said.
That came as charter rates stayed firm despite China’s week-long National Day holiday which ends at the weekend.
“Owners were asking around $6.10 per tonne from Western Australia to China on Thursday and $13 per tonne from Brazil to China,” a Singapore-based capesize broker said on Thursday.
Freight rates are climbing towards the year-highs touched on Sept. 22.
“The market has been rising on the back of operators chartering vessels to move iron ore, but all the miners are in the market today. The market has been pretty busy today,” the broker added.
The operators included ship owners such as Germany’s Oldendorff and commodity traders Cargill and Hong Kong’s Caravel, chartering data on the Reuters Eikon terminal showed.
“I think the market will level out and take another breather. Everyone is now more bullish about the market. The capesize market is looking good for the next month to six weeks,” the broker said.
A short-term shortage of capesize ships in the Atlantic Ocean to transport iron ore from Brazil has resulted in stronger rates, Norwegian ship broker Fearnley said in a note on Wednesday.
Capesize rates rose this week after slipping at the end of last week.
Charter rates for the Western Australia-China route were at $5.65 per tonne on Wednesday compared with $5.86 per tonne the same day last week.
Freight rates from Brazil to China were at $12.14 per tonne on Wednesday compared with $12.35 per tonne last week.
That came as shipping lobby group BIMCO said the dry bulk sector can only return to profitability in 2019 “if shipowners deliver zero supply side growth, year-on-year”.
The comments, made in a report published on Thursday, reiterated those the body first made in May.
“The fragmented ownership of the dry bulk fleet cannot be sustained over the length of the downturn and we will see greater consolidation, meaning fewer and bigger companies,” the BIMCO report added.
Charter rates for smaller panamax vessels for a north Pacific round-trip voyage fell to $5,769 per day on Wednesday from $6,327 per day last week.
Chartering activity was muted leaving the Pacific panamax market to slowly loose steam due to Asian holidays, the Fearnley note said.
For smaller supramax vessels, freight rates in the Far East fell to around $6,000-$6,500 per day this week on subdued chartering activity compared with around $7,500 per day last week, brokers said.
The Baltic Exchange’s main sea freight index fell to 869 on Wednesday from 912 a week earlier.
Source: ReutersPrevious Next