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Asia Dry Bulk -Capesize rates to slide or hold steady as cargo volumes weigh

Published 05/11/2015, 08:12 pm
Updated 05/11/2015, 08:20 pm
© Reuters.  Asia Dry Bulk -Capesize rates to slide or hold steady as cargo volumes weigh
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* Capesize rates nearing the bottom - Shanghai broker

* Global iron ore demand to hit 3 bln tonnes by 2030 -Rio Tinto

By Keith Wallis

SINGAPORE, Nov 5 (Reuters) - Freight rates for capesize bulk carriers could hold around current levels or nudge slightly lower next week as cargo volumes fail to match the number of ships available for charter, brokers said on Thursday.

That came as the traditional fourth quarter bounce in rates from strong year-end cargo demand remained elusive, brokers added.

"No one expected the fourth quarter to be so bad," said a Shanghai-based capesize broker.

"Last week people were saying we were at the bottom of the market already. My feeling is we are near the line but not yet," the broker said.

Market players were slowly losing hope of witnessing any big spike in rates this year, Norwegian shipbroker Fearnley said in a note on Wednesday.

"Unless miners like Vale VALE5.SA push more cargo out in the market I don't see any sign rates can get better," the Shanghai broker said.

Rates have continued to slide in the last week, losing between 25 and 75 U.S. cents per tonne since last Wednesday depending on the route.

Large 180,000 deadweight tonne capesize vessels typically haul iron ore and coal from Australia, Brazil and South Africa to markets in Asia and Europe.

"I can't see Brazil rates going below $10 a tonne," an Australian-based capesize broker said. Rates from Australia to China could stay above $4-$4.50 a tonne, the broker said.

Longer term Rio Tinto (L:RIO) RIO.AX said on Thursday it expects to see strong demand growth for iron ore in countries outside China with projected global demand of 3 billion tonnes by 2030, up from 1.4 billion tonnes in 2015. urn:newsml:reuters.com:*:nL3N1301B0

Charter rates for the Western Australia-China route .BAWB fell to $4.58 per tonne on Wednesday, down from $4.77 per tonne a week ago, although actual rates paid by charterers were lower at $4.50 per tonne.

Rates for the Brazil-China route .BATB dropped to $10.50 per tonne on Wednesday, against $11.35 per tonne the same day last week.

Panamax rates for a north Pacific round-trip voyage .BPHJ fell to $4,501 per day on Wednesday, compared with $5,326 per day last week, the lowest since June 5.

"The panamax market remains weak despite decent activity level in both hemispheres. It seems that only bad weather and delays can create a flash now before 2015 books are closing," the Fearnley note said.

Freight rates for smaller supramax vessels slipped to around $6,500 per day from China to Indonesia, brokers said.

The Baltic Exchange's main sea freight index .BADI fell to 657 on Wednesday, down from 736 last Wednesday.

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