Freight rates for large capesize dry cargo ships on key Asian routes may firm up next week on increased chartering activity, tighter tonnage supply and possible port disruption caused by bad weather in China, ship brokers said on Thursday. "The general consensus is there will be an improvement in rates next week," a Singapore-based capesize broker said.
Shipowners on Thursday were already offering higher rates of about $10 per tonne for iron ore cargoes from Brazil to China due to limited availability of ships, brokers said. "I think they are being a bit greedy," a Shanghai capesize broker said, adding the prevailing rate was around $9 per tonne. "Prices for cargo derivatives have pushed up, so people are saying the market will firm," the Shanghai broker said.
That came after limited chartering this week with just 10 capesize fixtures by Wednesday's market close, data on the Reuters Eikon terminal showed. "It's very, very quiet," the Shanghai broker said. BHP Billiton, Fortescue Metals Group and Vale were absent from the open chartering market this week, with only Rio Tinto active, the data showed.
"Rio Tinto has the cargo volume, but it needs FMG and BHP out there to prop up the market," the Singapore broker said. The possibility of fog at discharge ports in China could disrupt sailing schedules, forcing charterers to pay higher freight rates to cover cargo commitments, the Singapore broker said. That came as dry bulk cargo demand is expected to remain subdued this year, at a similar level to 2015 as China's slowdown continues to weigh on commodities demand, ratings agency Moody's said in a shipping industry report on Wednesday.
Delays in vessel deliveries will help freight rates increase modestly this year, the report said. "Until there is a squeeze on tonnage, which won't happen for a year or two, it's difficult to see any major changes to the capesize market," the Singapore broker said.
Capesize charter rates for Western Australia-China fell to $4.33 per tonne on Wednesday, close to a three-week low, from $4.83 per tonne last week. Freight rates were also around a three-week low at $8.99 per tonne on Wednesday for a capesize charter from Brazil to China, against $9.26 per tonne on the same day last week.
Charter rates for smaller panamax vessels for a north Pacific round-trip voyage climbed to $4,167 per day on Wednesday compared with $3,794 per day a week earlier on higher cargo volumes. Panamax rates have risen since June 13 when they fell to $3,751 per day, the lowest since March 4. Freight rates in the Far East for smaller supramax vessels rose slightly around $6,000 per day this week on more cargo, brokers said. The Baltic Exchange's main sea freight index dropped to 585 on Wednesday from 604 last week.
Comments
Comments are closed.