Asian Capesize Rates To Slide As Cargo Fixtures Dry Up

bhp billiton port hedland western australia bulk carrier — Western Australia Iron Ore is one of the world’s premier suppliers of iron ore. Image (c) BHP Billiton

By Keith Wallis

SINGAPORE Nov 14 (Reuters) – Rates for capesize bulk carriers on key Asian routes are expected to fall going into next week in the absense of significant chartering activity by major Australian and Brazilian miners, ship brokers said.

A flurry of fixtures by BHP Billiton Ltd and Rio Tinto Ltd earlier this week pushed rates towards $10 per tonne from Australia to China, but the rally ended after new business dried up on Tuesday, one Singapore-based capesize broker said on Thursday.

“The market has a softer feel. I don’t see a sudden uptick. It’s not pretty, but levels are hovering around $9 per tonne,” the broker said.

“All the signs are the market will come down. It can get worse and could come off a lot more,” he added.

Benchmark capesize rates from Australia to China closed at $9.25 per tonne on Wednesday, although the last fixture done was $9.19 per tonne. That was down from $9.30 per tonne based on data a week before from British shipping services firm Clarkson.

Capesize rates from Brazil to China slipped to end at $21.75 on Wednesday, compared with $22 per tonne a week earlier based on Clarkson data.

“There are no signs of the rally which is still expected to happen before Christmas. However, rates are rather keeping steady,” ship broker Fearnley said in a research note.

Brokers said panamax rates were “fairly flat” but trending softer at around $10,000 per day on Thursday morning for ships coming open in China for a transpacific voyage and a $1,000 per day premium for ships available in Japan.

Rates for a panamax transpacific voyage closed at $10,438 on Wednesday.

Supramax rates, though, were “still holding firm” on Thursday with a balance in the supply of ships and cargo demand, said a Singapore-based supramax ship broker.

Falls in the capesize and panamax markets led the Baltic Exchange’s main sea freight index, to drop to 1,531 on Wednesday, a loss of 71 points on the week.

Technical charts indicated the benchmark was expected to consolidate in a range of 1,474-1,632 this week, although a drop below 1,474 would open the way to a further fall towards 1,315.