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Asia Dry Bulk-Capesize rates could climb on higher iron ore volumes

Published 14/07/2016, 06:55 pm
© Reuters.  Asia Dry Bulk-Capesize rates could climb on higher iron ore volumes
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* Capesize rates from Australia and Brazil flat, stable - brokers

* Panamax rates hit a new nine-month high

* Supramax rates rise to $6,200 per day on strong coal volumes

By Keith Wallis

SINGAPORE, July 14 (Reuters) - Freight rates for large capesize dry cargo ships on key Asian routes could rise next week on higher volumes of iron ore cargoes, ship brokers said.

"It's a bit more positive, optimistic next week," a Singapore-based capesize broker said on Thursday.

Australian iron ore miners BHP Billiton (LON:BLT) BHP.AX and Fortescue Metals Group FMG.AX , which have largely been absent from the chartering market this week, could step up iron ore shipments on higher iron ore prices, brokers said.

"It's only really been Rio Tinto (LON:RIO) RIO.AX that's been active for much of this week. BHP has taken the odd ship," the Singapore broker said.

All the iron ore cargo charters from Australia to China this week were fixed at $4.55 per tonne, signalling a flat market, brokers said.

That is equivalent to daily time charter earnings of around $7,500, Norwegian ship broker Fearnley said. Daily operating costs are about $7,000 for a capesize ship, accountancy firm Moore Stephens said.

"Sentiment is good although the market this week was not as good as we expected. Ship owners are confident about cargo volumes so they would rather wait on the expectation rates and cargo volumes will rise," a Shanghai-based capesize broker said.

The Brazil to China market has been fairly stable but rates could firm after several fixtures were concluded at the time charter equivalent of $15,000-$16,000 per day, Fearnley said in a weekly note on Wednesday.

"Iron ore prices have seen a strong increase lately and this has triggered some expectations of higher activity level from shippers and hence higher freight levels," the note added.

Spot iron ore prices .IO62-CNI=SI rose 9 percent in June, and are up about 37 percent so far this year, while iron ore imports rose 9 percent in the first six months compared with a year ago. charter rates for Western Australia-China .BAWB slipped to $4.56 per tonne on Wednesday, against $4.63 per tonne last week.

Freight rates from Brazil to China .BATB were at $9.38 per tonne on Wednesday, from $9.49 per tonne the previous week.

Charter rates for smaller panamax vessels for a north Pacific round-trip voyage .BPHJ hit a new nine-month high on Wednesday, soaring to $6,233 per day buoyed by stronger coal and iron ore cargo volumes. That compared with $5,822 per day on the same day last week.

Freight rates in the Far East for smaller supramax vessels rose to around $6,200 per day on increased coal volumes.

"With most of the requirements covered, the coal market could cool down in the following days; however there is still positive development seen for steel in north China," Fearnley said.

The Baltic Exchange's main sea freight index .BADI rose to 726 on Wednesday from 694 last week.

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