Despite lower rates, rental prices doubled from last year; capesize vessels totalling 15 million DWT to be delivered this year – broker.
Freight rates for large capesize dry cargo ships on key Asian routes are likely to drift lower as tonnage volumes outpace cargo demand even as owners resist charterers’ attempts to push rates lower, ship brokers said.
Despite the subdued market, capesize charter rates are still around twice the level as compared with previous year.
“The market is holding up relatively nicely. Last year, we didn’t fix ships at current rates until June,” a Singapore-based capesize broker said on Thursday.
“Owners are doing what they can to resist charterers’ lower offers, but there is no shortage of ships, especially in the Pacific,” the broker said.
Rates on the Western Australia-China route are likely to slip towards $5 per tonne by early next week, while rates on the Brazil-to-China route could be under $11 per tonne, the broker said.
Lower levels of iron ore exports and plant maintenance has restricted chartering activity from Brazil, Norwegian ship broker Fearnley said in a note on Wednesday.
“The Pacific market does have healthy volumes of cargoes out of Western Australia, but there is an oversupply of tonnage at the moment,” Fearnley added.
Charters for 32 capesize ships were agreed in the week ended Wednesday, almost double the number the previous week, chartering data on the Reuters Eikon terminal showed.
Capesize vessels totalling around 15 million deadweight tonnes (DWT) are scheduled for delivery this year after accounting for delays and order cancellations, ship broker Banchero Costa said in a market report on Wednesday. That compared with 19.7 million DWT in 2016.
Some charterers, including DHL and Anglo American, have been seeking to lock-in ships on long-term charter on the expectation of higher freight rates later in the year when they could re-charter vessels to other charterers, brokers said on Thursday.
“There are opportunities for vessel operators with margins and profits to be made,” the Singapore broker said.
Charter rates from Western Australia to China fell to $5.37 per tonne on Wednesday, against $6.29 per tonne last week, when rates hit the highest since Nov. 29.
Freight rates for the route from Brazil to China dropped to $12.03 per tonne on Wednesday compared with $13.50 per tonne the same day last week. Rates hit $13.96 on Jan. 5, the highest since Sept. 28, 2015.
Charter rates for smaller panamax vessels for a north Pacific round-trip voyage touched $5,738 per day on Wednesday from $4,944 per day a week earlier on stronger cargo volumes, brokers said.
Rates in the Far East for supramax vessels continued to fall with charterers paying around $3,000 per day for ships carrying scrap steel from China to southeast Asia, Fearnley said.
The Baltic Exchange’s main sea freight index fell to 894 on Wednesday from 969 last week.
Did you subscribe for our daily newsletter?
It’s Free! Click here to Subscribe!
Source: Reuters
