Charterers to push capesize rates lower on ship glut
Monday, 28 July 2014 00:00
-
- {{hitsCtrl.values.hits}}
Reuters: Rates for capesize bulk carriers on key Asian routes will fall more next week as cargo owners bide their time chartering ships and shipowners fail to resist charterers’ attempts to push rates lower, brokers said.
“It’s all looking pretty grim,” said one Singapore-based capesize broker, with rates on capesize routes from Australia and Brazil to Asia around the lowest since late May.
“Charterers have cargoes available but are in no rush to fix vessels in the hope of pushing rates lower. There is no resistance to accept lower rates from owners. There are just too many ships,” the broker said.
There has been some chartering activity this week by Australian miners including Rio Tinto and Fortescue Metals Group, and Vale from Brazil.
“But the market is not getting the volume of charters to lift rates,” the broker said.
Vale’s July fixture program is mostly concluded. “Owners will have to wait now until August before chartering picks up,” the broker said.
Rates for the Western Australia-China route closed at $ 7.56 per ton last week, down from $ 7.76 a week earlier.
Freight rates for the Brazil-China route closed at $ 19.11 against $ 21.55 per ton a week ago. The last concluded fixture was lower at $ 18.77.
Both benchmarks are not far from the levels seen in late May.
“The only way is down,” the Singapore broker said.
“Brazil to China has seen activity but is overwhelmed by ships in ballast who have pushed the market to below $ 19 per tonne,” Norwegian broker Fearnley said in a note.
“Planned maintenance at the (Saldanha Bay) South African export facility will reduce the number of cargos for a 10-day period in August and this will add to an already depressed market,” the Fearnley note added.
Charter rates for smaller panamax vessels will continue to drop with ‘100s in the market’ available for charter with ‘only a handful of cargoes’ to be fixed, a Singapore-based panamax broker said on Thursday.
Most of the charters were for coal and petcoke cargoes from Indonesia to India, the broker said.
The coal market from Australia and grain market from the east coast of South America were both quiet which had exacerbated the oversupply of tonnage, the broker said.
Rates for a panamax transpacific voyage closed at $ 5,181 per day on Wednesday, off last week’s five-week high of $ 5,900 per day. But the last concluded fixture was lower at $ 4,931 per day and rates are expected to fall further, the broker and Fearnley said.
Charter rates for supramax vessels are set to soften after falling to around $ 8,000 per day this week for a voyage from Singapore to India, against $ 11,500 per day last week, Fearnley said in its weekly note.
The Baltic Exchange’s main sea freight index closed at 755 points last week, down from 863 a week earlier. Technical analysis showed the index is expected to fall to 664 in a week after it broke below support at 847.
