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Asia Dry Bulk-Pacific, Atlantic capesize rates set to diverge

Rates for capesize bulk carriers could diverge next week, holding steady in the Pacific on healthy cargo volumes but easing in the Atlantic on a lack of coal and iron ore cargoes from South Africa and Brazil, ship brokers said.

“There’s still a fair amount of cargo from Australia. But not a huge amount of action from South Africa and Brazil,” said a Singapore-based capesize broker.

“I think the Pacific has reached a bottom for now,” he added.

“Rates from Brazil and South Africa will likely drop – I can’t see them pushing up unless we see more influx of cargo.”

Several owners of larger capesize ships this week shifted from chartering their ships on a spot to a voyage-time charter where earnings were slightly higher, brokers said.

Oldendorff chartered two 200,000 dwt (deadweight tonne) capesize vessels for single trip time charters at $8,000 per day, slightly higher than daily operating costs of about $7,300 per day, according to data from Reuters and shipping accountancy firm Moore Stephens.

“I can’t say the market has reached the $8,000 per day level. The capesize market is still around $5,000-$6,000 a day,” said a Shanghai capesize broker.

The higher daily rate was because the vessels can carry a larger volume of cargo and had good fuel consumption, the Shanghai broker said.

Charter rates for the Western Australia-China route were around $5.15 on Wednesday, virtually flat from $5.13 per tonne last Wednesday.

Rates for the Brazil-China route eased to $10.93 per tonne on Wednesday, down from $11.08 per tonne last week.

Freight rates in the smaller panamax market are likely to slide next week as cargo volumes fail to match the supply of available tonnage, a Singapore-based panamax broker said on Thursday.

“We need to see an influx of fresh cargo … or a spot of bad weather (for rates to rise),” the broker said.

Rates for a panamax transpacific voyage fell to $4,334 per day on Wednesday, down from $4,496 on the same day last week.

Freight rates for smaller supramax vessels were around $7,000 per day for coal cargoes from Indonesia to India, Norwegian ship broker Fearnley said in a weekly report on Wednesday.

The Baltic Exchange’s main sea freight index closed up at 598 on Wednesday, against 587 a week ago.
Source: Reuters