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, Sept 30 (Reuters) – Freight rates for large capesize dry cargo shippers on key Asian routes, which hit the highest in about a year last Thursday, are set to remain buoyant during China’s week-long National Day holiday that starts on Saturday, ship brokers said.
“The market is always firm during Golden Week holidays, so I don’t think the capesize market will fall off a cliff,” a Shanghai-based capesize ship broker said on Friday.
“I think the market will stay around current levels and maybe go up a bit as we start the fourth quarter,” the broker said.
Capesize rates slipped after peaking last week as Brazilian miner Vale and Australian miners Fortescue Metals Group and BHP Billiton were largely absent from the market, brokers said.
There were 21 capesize spot charter fixtures recorded in the week to September 29, compared with 44 in the previous week, data on the Reuters Eikon terminal showed.
“People are a little more optimistic that chartering activity will pick-up next week,” a Singapore-based capesize broker said on Friday.
The number of vessels available for loading in October from Australia is tight with only eight or nine ships still available to load cargo in October, the broker said.
Fixture data this week showed most vessels were chartered for loading in the first 20 days of October, suggesting there is still cargo to load for the end of next month, according to data on the Reuters Eikon terminal.
“Owners are still optimistic the capesize market will come back in the fourth quarter,” the Singapore-based broker added.
Capesize charter rates for the Western Australia-China route fell to $5.56 per tonne on Thursday compared with $6.46 per tonne last week, the highest since Aug. 11, 2015.
Freight rates from Brazil to China slipped to $12.04 per tonne on Thursday from $12.78 per tonne the same day last week, the highest since October 5, 2015.
Charter rates for smaller panamax vessels for a north Pacific round-trip voyage climbed to $6,227 per day on Thursday, up from $5,914 per day last Thursday. Rates hit $6,347 per day on September 27, the highest since July 26.
The increase was assisted by charterers splitting capesize cargoes into two Panamax stems, Norwegian ship broker Fearnley said in a note on Wednesday.
For smaller supramax vessels, freight rates in the Far East were largely unchanged at around $7,500 per day for cargoes from Indonesia to China, Fearnley said.
The Baltic Exchange’s main sea freight index fell to 888 on Thursday down from 937 last Thursday.
(c) Copyright Thomson Reuters 2016.
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