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Asia Dry Bulk-Capesize rates could gain next week, owners upbeat on Q4

Published 11/08/2016, 06:28 pm
Updated 11/08/2016, 06:30 pm
© Reuters.  Asia Dry Bulk-Capesize rates could gain next week, owners upbeat on Q4
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* More activity from Australian miners buoy capesize rates

* Dry cargo market remains over-tonnaged as fleet growth outpaces demand -Bancosta

By Keith Wallis

SINGAPORE, Aug 11 (Reuters) - Freight rates for large capesize dry cargo ships on key Asian routes should stay largely unchanged next week on static cargo volumes though shipowners remain confident about prospects in the fourth quarter, ship brokers said.

"I feel it's another boring week. People still have confidence in quarter four," a Shanghai-based capesize broker said on Thursday.

That came as Rio Tinto (LON:RIO) RIO.AX fixed the 178,623 deadweight tonne (dwt) capesize ship Mount Austin on Thursday to haul iron ore from Western Australia to China at a rate of $4.40 per tonne, brokers said.

The rate was about 10 cents higher than the Baltic dry bulk index rate for the route on Wednesday.

"I think rates from Western Australia to China will be around $4.50-$4.80 per tonne and around $9.10-$9.30 per tonne for Brazil to China, next week," the Shanghai broker said.

Australian iron ore miners Fortescue Metals Group FMG.AX and BHP Billiton (LON:BLT) BHP.AX were slightly more active this week, which helped buoy rates, although the number of global capesize spot charters remained unchanged at 23.

"The Pacific side is looking more positive, driven by Australian iron ore. Increased activity by the Australian miners has improved rates by 30 cents so far this week and owners are convinced the trend will continue," Norwegian ship broker Fearnley said in a note on Wednesday.

But the coal market remained quiet with around three or four capesize cargoes for loading in eastern Australia in September remaining unfixed, the Shanghai broker said.

"Charterers believe the market will drop somehow so are in no rush to fix yet," the broker said.

Charter rates on the Western Australia-China route .BAWB rose to $4.27 per tonne on Wednesday from $3.83 per tonne last week, the highest since July 19.

Freight rates from Brazil to China .BATB climbed to $9.02 per tonne on Wednesday against $8.86 per tonne the same day last week.

That came as the dry cargo market remained over-tonnaged despite growth in cargo volumes, a dry bulk market report from ship broker Banchero Costa (Bancosta) said on Wednesday.

Seaborne dry cargo trade growth is expected to rise by 1 percent this year compared with 3 percent growth in the dry bulk fleet, the report said.

"Significant oversupply, coupled with marginal trade growth, is expected to keep pressure on the dry bulk market," the Banchero report said.

Charter rates for smaller panamax vessels for a North Pacific round-trip voyage .BPHJ slipped to $5,181 per day on Wednesday, from $5,266 per day last Wednesday. That was due to holidays and muted chartering activity, the Fearnley note said.

Charter rates for supramax vessels are likely to soften due to holidays in India next week, brokers said.

The Baltic Exchange's main sea freight index .BADI was slightly lower at 638 on Wednesday from 641 last week.

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