Cape rates jump to six-month highs (but storm clouds loom)

capesize vesselCapesize freights rose by as much as 38% last week, according to some metrics, with the recover in senti­ment buoyed by the reopening of Vale’s Brucutu iron ore mine in Brazil and very strong voyage acti­vity in the Pacific. With over 80% of bulk carrier trade said to be linked to iron ore (also, according to some metrics), the oversized influence of this com­modity on the bulker trades can scarcely be underestimated. Rates have continued to climb as business resumed this week after the weekend, usually a sign of a bullish market, with TARV rates moving into the US$ 9,000s and Pacific round voyages climbing into the low teens of US$ 10-11,000 daily. Front hauls have already been fixing low US$ 20,000s of up to US$ 22,000 daily, according to some brokers’ reports, with shipowners having regained the con­trol in negotiations for the first time in many weeks. These higher levels are nonetheless precarious, traders warn, as sentiment-driven as the Cape market is, another snap in geopolitical events could send rates tumbling as fast as they climbed in the final week of April. Owners hope that market fundamentals will solidify (as open tonnage tightens up) to keep this from happening.

With solid activity resuming across the Atlantic, at least from South America, Panamax front hauls are given just enough support to hold steady in the US$ 11-12,000 daily range for tonnage of 82,000 dwt, though ECSA export shipments are nonetheless still too infrequent for the taste of many owners. Trans-Atlantic trips ex-ECSA to the Continent are trading in the mid teens of US$ 15-16,000 on Kamsarmax tonnage whereas US$ 14-15,000 is more likely for standard tonnage. Inter-Pacific traffic has been surprisingly buoyant of late with NoPac rounds exceeding US$ 10,000 daily on 82,000 dwt ships and already rumoured as trading just under US$ 11,000.

Still seeking traction in the same manner as the larger vessels, the Handy bulkers start the week on a struggling basis with little impetus to be found in either hemisphere. There is talk of thinning tonnage off the Continent and South America, but this has so far not translated into any firming trends on spot rates, let alone new fixtures. Black Sea front hauls have nonetheless managed to stay within US$ 12-13,000 daily on Tess 58s while the same ship can likely fix up to US$ 17,500 from the USG to CJK.

To get shipbroking news and analysis like this every morning, subscribe to the BMTI Daily Report.

Comments are closed.