Bad Weather and Early Fixtures Buoy Capesize Rates

Iron ore is loaded on to the Pacific Ruby, a Capesize bulk carrier berthed at Rio Tinto’s Cape Lambert port. Image (c) Rio Tinto

By Keith Wallis

SINGAPORE Dec 12 (Reuters) – Rates for capesize bulk carriers on key Asian routes are set to remain firm going into next week due to bad weather in Australia and buoyant fixture activity by major iron ore miners, ship brokers said on Thursday.

Charter rates for voyages from Australia to China were nudging $17 per tonne on Thursday, jumping almost $5 per tonne on the week.

The rise was fuelled by miners including Rio Tinto seeking to fix early ships because bad weather in Western Australia had disrupted sailing schedules, said one Singapore-based ship broker on Thursday.

“The market will hold steady at least into the start of next week. It will come off pretty quickly at some stage,” said the broker. He added the latest fixture was concluded at $16.75 per tonne.

Benchmark capesize rates from Australia to China closed at $14.46 per tonne on Wednesday up from $12.26 per tonne a week earlier.

Capesize rates from Brazil to China jumped to close at $28.42 on Wednesday against $26 at last Wednesday’s close. The last done was at $29.50 per tonne, equivalent to daily earnings of about $56,000, the highest level since October 2010.

It is “exciting times for the big ships as in particular iron ore miners struggle to cover their needs for pre-Christmas loaders from West Australia and early 2014 stems from Brazil,” said Norwegian ship broker Fearnley in a research note on Wednesday.

Panamax rates are set to hold steady next week even as the north Pacific transpacific market remains quiet, said one Singapore-based panamax broker on Thursday.

Buoyancy in the panamax was due to charterers splitting capesize cargoes, especially for coal exports from Australia, into two panamax stems due to higher capesize rates, the broker said. The market is also finding support from US grain cargoes and coal exports from India.

“I am not sure how much gusto the panamax market has still got,” the broker warned.

Rates for a panamax transpacific voyage closed at $14,091 on Wednesday from $12,433 a week earlier. The last done was higher at $14,322.

Supramax rates remained strong on coal cargoes from Indonesia, said one supramax broker.

The Baltic Exchange’s main sea freight index soared to 2,299 on Wednesday, a rise of 305 points on the week. (Reporting by Keith Wallis; Editing by Anand Basu)

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