High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
By Keith Wallis
SINGAPORE, Dec 22 (Reuters) – Freight rates for large capesize dry cargo ships on key Asian routes could diverge with rates from Brazil to China nudging higher on a shortage of tonnage and those from Australia to China holding firm around current levels on ample cargo, ship brokers said.
“Tonnage is very tight given the number of ships available for January loading dates from Brazil. Rates should keep pushing higher,” a Singapore-based capesize broker said on Thursday.
“There are only a couple of ships available to load for the first half of January,” the broker added.
“Vale is offering rates around the index level, but ship-owners are making offers about $1 per tonne above that,” the broker added.
The Brazilian miner fixed three cargoes in recent days, the broker said although they appeared to be off-market deals that have not been publicly reported.
Coal cargoes and iron ore shipments from South Africa also helped support capesize rates in the Atlantic, the broker said.
Iron ore and coal are staple cargoes for 180,000 deadweight tonne capesize ships.
Charter rates from Australia to China were flat even though there was more activity from miners including BHP Billiton .
Brazil increased its market share of Chinese iron ore imports to 20.8 percent this year, from 19.2 percent in 2015, according to a report this week by ship broker Banchero Costa.
“Volumes in the first 10 months reached 175.8 million tonnes, up 17.65 percent from the same period in 2015,” the report said.
But Australia remained the largest iron ore exporter to China, accounting for 62.5 percent, or 526.8 million tonnes, of all volumes up to October, the report added.
Charter rates from Western Australia to China were flat at $5.07 per tonne on Wednesday from $5.08 per tonne a week ago.
Freight rates from Brazil to China climbed to $11.53 on Wednesday, the highest since Dec. 7, against $10.39 per tonne, a week earlier.
“Rates from Brazil-China could nudge higher, while rates for Australia to China will be firm but flat,” a Shanghai-based ship broker said on Wednesday.
“I believe the market will be firm during the Christmas holidays,” the Shanghai broker added.
Charter rates for smaller panamax vessels for a north Pacific round-trip voyage dropped to $5,825 per day on Wednesday from $7,362 per day last week.
The panamax market had a quiet start to the week but rates were in steep decline, Norwegian ship broker Fearnley said in a report on Wednesday.
Rates in the Far East for supramax vessels dropped to around $6,500 per day from $7,800 per day last week for coal shipments from Indonesia to China, brokers said.
The Baltic Exchange’s main sea freight index fell to 926 on Wednesday compared with 1,003 a week ago. (Reporting by Keith Wallis; Editing by Joseph Radford)
(c) Copyright Thomson Reuters 2016.
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