| SINGAPORE June 19
SINGAPORE June 19 Rates for capesize bulk
carriers on key Asian routes are set to hold steady as
charterers maintain leasing activity, even as Asian rates for
smaller panamax vessels have plunged to their lowest since
January 2013 on a dearth of cargoes, brokers said.
Capesize rates on benchmark routes from Brazil to China and
Australia to China began rising again this week on renewed
chartering activity from the big miners after declining last
"There was more chartering activity on Wednesday. A dozen or
so ships were fixed after a slow start to the week," said one
Singapore based capesize broker on Thursday.
Capesize rates have see-sawed since April, rising and then
falling although each peak has generally been higher than the
last, Reuters freight data showed.
"The big question is whether it is sustainable," the broker
said, adding he thought the volatility would continue until
August when capesize rates would show stronger gains on
increased cargo demand.
While owners are resisting pressure from charterers to push
Australia-China freight rates lower, there are some 80 capesize
ships available on the spot market in the Pacific basin which
could push rates lower, the broker said.
But with around 20 capesize fixtures this week, some of
which are unreported, excess tonnage could be soaked up to hike
rates further, the broker said.
Rates for the Western Australia-China route closed
at $7.70 per tonne on Wednesday, although the last concluded
fixture was slightly higher at $7.80 per tonne. This compared
with last Wednesday's close of $7.90 per tonne although rates
had dropped lower by Friday.
Rates for the Brazil-China route closed at $20.60
per tonne on Wednesday, unchanged from last week, although the
last done was higher at $22 per tonne. But Wednesday's close was
on a rising market this week, against a falling market last
"(There are) glimpses of improvement following days of
softening and consequent surge of confidence for the big ships
as major miners keep taking July loaders on the important
Brazil/China ore route," Norwegian broker Fearnley said in a
note on Wednesday.
IDLING OF PANAMAXES
By comparison rates in the Pacific for panamax vessels,
ships about half the size of capesize, are continuing the plunge
that started a month ago.
Rates are below operating costs which has led owners to idle
ships in China rather than fix loss-making voyages, brokers
said, as too much tonnage chased too few cargoes.
"It's terrible. It's really depressing," said a
Singapore-based panamax broker.
Rates for a panamax transpacific voyage closed at
$4,111 per day on Wednesday, down from $5,322 a week earlier,
while the last concluded fixture was lower at $3,906. Rates have
steadily fallen from $8,031 per day on May 20.
Daily operating costs for panamax vessels are about $7,000
per day, according to estimates from consultant Drewry Maritime
The fall in rates is likely to continue until mid-July when
charterers increase the volume of north Pacific grain cargoes,
the broker said.
Some capesize charterers, who would take advantage of the
arbitrage between capesize and panamax rates by splitting a
single capesize cargo into two panamax shipments, have yet to
try to benefit from the rate differential, the broker said.
"The panamax market needs to show substantial falls for a
sustained period before charterers split cargoes," the broker
Owners of supramax vessels are seeing rates of about $5,000
per day for a voyage from Indonesia to China as overtonnage
weighs on the market, a broker said.
The Baltic Exchange's main sea freight index closed
at 867 on Wednesday, down from 973 a week earlier.
(Editing by Muralikumar Anantharaman)