By Keith Wallis
SINGAPORE, March 3 (Reuters) – Freight rates for large capesize dry cargo vessels on key Asian routes could remain rangebound next week as abundant tonnage puts a ceiling on freight rates even as some owners resist attempts by charterers to push rates lower, brokers said.
“I expect the market to take a breather. Rates have been on a yo-yo this week,” said a Singapore-based capesize broker on Friday.
Charter rates fell at the beginning of the week, but rebounded after charterers, including Cargill and Fortescue Metals Group, fixed ships from Brazil and Australia to China, he said.
There were around 25 capesize fixtures in the week to March 2, compared with more than 30 in the previous week, chartering data on the Reuters Eikon terminal showed.
“The capesize market continues to be volatile,” Norwegian shipbroker Fearnley said in a note on Wednesday.
“The Brazil to China market has been quiet, but it is not unexpected as it is the seasonal rainy season and shippers do use this time for maintenance,” Fearnley said in the note.
Some shipowners are also resisting charterers’ attempts to push rates from Brazil to China lower by anchoring vessels off South Africa, the Singapore broker said.
Charterers with coal cargoes from the east coast of Australia were offering a $2 per tonne premium over iron ore cargoes from western Australia.
But the capesize market remained overtonnaged with an abundance of ships available for loading in March, the Singapore broker added. That would cap any gains in rates.
Charter rates from Western Australia to China held around eight-week highs, at $5.99 per tonne on Thursday, compared with $6.01 per tonne a week earlier.
Freight rates for the route from Brazil to China rose to $11.42 per tonne on Wednesday, the highest since Feb. 2, against $11.05 per tonne.
Charter rates for smaller panamax vessels for a north Pacific round-trip voyage climbed to the highest since November 2014 on Thursday on strong cargo volumes and bullish sentiment among shipowners.
Rates rose to $9,170 per day, the highest since Nov. 24, 2014, from $7,704 the same day last week.
Rates in the Far East for supramax vessels rose by around $2,000 per day on the week, climbing to $10,500 per day for a voyage from Indonesia to China, Fearnley said.
The Baltic Exchange’s main sea freight index climbed to 904 on Thursday from 856 last week and could rise towards a technical resistance at 1,029 in a week. (Reporting by Keith Wallis; Editing by Subhranshu Sahu)
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