Freight rates for large capesize dry cargo vessels on key Asian routes, which are close to multi-month highs, are likely to remain firm next week as cargo activity picks up from Australia after bad weather disrupted operations at Dampier this week, brokers said.
“The capesize market is steady. Rates are well above where people expected them to be,” a Singapore capesize broker said on Thursday.
“The market might correct itself slightly, but there’s no need to panic,” the broker added.
Average capesize earnings were around $19,180 per day last Friday, compared with around $2,931 per day a year earlier, according to data from shipping services firm Clarkson.
That came as charter rates from Brazil to China surged to $16.70 per tonne on Monday, the highest since Dec. 3, 2014.
Rates on the route from Australia to China climbed to $6.93 per tonne last Friday, the highest since Nov. 22.
Norwegian ship broker Fearnley said the capesize market is “taking a breather after rallying – but (the) outlook for weeks to come (is) not scary.”
There are “huge iron ore volumes committed on the Brazil/China trade,” but only a limited number of vessels still available for charter to load cargo in April, Fearnley said in a note on Wednesday.
The closure of Dampier port due to bad weather this week dampened chartering activity and freight rates, the Singapore capesize broker said. The port reopened on Thursday, a move which is likely to lead to a pick-up in chartering activity and possibly higher rates, the broker added.
Charter rates from Western Australia to China slipped to $6.59 a tonne on Wednesday from $6.68 a tonne a week earlier.
Freight rates for the route from Brazil to China climbed to $16.24 per tonne on Wednesday from $15.96 per tonne the same day last week.
Charter rates for smaller panamax vessels for a north Pacific round-trip voyage fell to $9,807 per day on Wednesday, down from $10,089 per day last Wednesday.
Peter Sand, chief shipping analyst at industry lobby group BIMCO, said the rise in dry cargo freight rates this year “is certainly positive, but there is still work to be done on the supply side.”
“A significant level of demolition activity must be maintained,” he added.
Rates in the Far East for supramax vessels rose to around $12,500 per day for trips from India and Indonesia to China and North Asia this week compared with $9,000-$11,000 per day last week, brokers said.
The Baltic Exchange’s main sea freight index climbed to 1190 on Wednesday from 1147 last week.
Source: ReutersPrevious Next
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