In Dry Bulk Market 10/04/2015
Rates for capesize bulk carriers, which have been close to six-year lows for the last three months, are likely to remain at current levels next week in a market that remains over-tonnaged, brokers said.
“There is very little new cargo. There are too many vessels,” a Shanghai-based capesize broker said on Thursday.
“The capesize market has been basically flat for ages,” said a Singapore-based capesize ship broker on Thursday.
“People are not very hopeful (of an improvement in rates). I can’t see it recovering – it’s going to be a long year.”
New vessel deliveries are still outpacing the volume of tonnage withdrawn from the market, putting pressure on capesize rates.
Around 29 capesize and very large ore carriers totalling 6 million dwt (deadweight tonnes) were delivered in the first quarter of this year, ship broker Banchero Costa (Bancosta) said in a report on Wednesday.
Capesize ships totalling up to 4.9 million dwt were sold for demolition up to March, figures from Bancosta and British shipping services firm Clarkson showed.
While owners are increasingly talking about laying-up or scrapping ships to cut capacity, “it’s not going to have much of an impact until 2016,” the Singapore-based broker told Reuters.
Forty to 50 capesize ships are idled or laid up around South Africa and Asia, while about 30 capesize ships have been sold for scrap so far this year, brokers said.
Charter rates for the Western Australia-China route were around $4.38 per tonne on Wednesday, hovering in a range of $4.30 to $4.60 since early February. Rates are still close to $4.12 per tonne reached on Jan. 12, the lowest since December 2008.
Rates for the Brazil-China route were down at $9.87 per tonne on Wednesday, the lowest since Jan. 9 when they fell to $9.65, the lowest since January 2009.
Freight rates in the smaller panamax market are likely to continue to drop next week on lower fixture activity, brokers said.
Rates for a panamax transpacific voyage fell to $4,236 per day on Wednesday, continuing a downward spiral from Mar. 18 when rates hit $5,400.
Freight rates for smaller supramax bulk carriers were unchanged at around $6,000 per day, Norwegian ship broker Fearnley said in a weekly report on Wednesday.
The Baltic Exchange’s main sea freight index closed down at 580 on Wednesday against 596 last week.
Technical analysis showed the benchmark is expected to fall to 567 in a week.
