Britain To Build A ‘National Flagship’ To Promote Maritime Trade
by Alistair Smout (Reuters) – Britain is to build a new flagship to promote its business and trade interests around the world, the government said on Saturday, in a move it...
By Naomi Christie
(Bloomberg) — A deeper slump in earnings for ships that carry most of the world’s coal and ore cargoes would force owners to take vessels out of service, according to shipbroker RS Platou Markets AS.
Average daily earnings for Capesize ships fell to $3,735 today, the lowest in more than two years, according to data from the Baltic Exchange in London. Rates will probably remain low next year, according to Herman Hildan, shipping analyst at Platou.
“At the moment, they’re barely covering their operating costs,” Hildan said by phone today from Oslo. “It doesn’t make sense for owners to participate in fixing vessels” if rates fall further.
Signs of slowing growth in China, the world’s largest importer of thermal coal and iron ore, have caused a collapse in Capesize rates of about 90 percent this year. China’s economy will expand by 7 percent next year, the slowest growth in a quarter century, according to economist forecasts in a Bloomberg survey. Customs data showed a slump in ore imports in November.
Hildan’s own estimates show Capesize vessels are currently earning $6,900 a day on average. Shippers would begin taking their vessels out of service when the daily rate falls below $5,000, he said.
The rate for the vessels, which can carry as much as 160,000 metric tons of iron ore, has averaged $13,923 in 2014, according to Baltic Exchange data. Analysts were expecting daily earnings of $18,500, according the median of estimates gathered by Bloomberg in January.
“It looks like the market is going to continue being a big disappointment” in 2015, Hildan said.
Copyright 2014 Bloomberg.
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