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Asia Dry Bulk-Capesize rates could hit bottom as owners wait for cargo rebound

Published 15/10/2015, 07:44 pm
© Reuters.  Asia Dry Bulk-Capesize rates could hit bottom as owners wait for cargo rebound
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* End-of-year cargo flurry still anticipated - brokers

* November freight rates from Australia marginally up - broker

By Keith Wallis

SINGAPORE, Oct 15 (Reuters) - Freight rates for capesize bulk carriers could bottom next week as owners resist charterers' attempts to force rates lower on the expectation of an end-of-year cargo flurry, brokers said on Thursday.

"Nobody wants to lock-in freight prices at the current levels (and miss a November rates rebound)," said a Singapore-based capesize broker on Thursday.

"I am confident there will be one more (cargo) push before the end of the year," the broker said.

Owners anticipate major iron ore and coal miners such as BHP Billiton (L:BLT) BHP.AX , Rio Tinto (L:RIO) RIO.AX and Vale VALE5.SA will release a raft of charters for loading in the next few weeks that will push freight rates higher depending on the volume of cargo, said a Shanghai-based capesize broker.

"I feel charterers are holding back cargo to push the market down. But with rates from Western Australia at about $5 a tonne I don't expect it to get much worse," the Shanghai broker said.

Capesize rates have sunk after Chinese seaborne coal imports plunged this year by at least 60 million tonnes, according to British shipping services firm Clarkson.

"The coal market traditionally should be stronger in November due to winter stockpiling," the Shanghai broker said.

Rates for vessels arriving in Australia in November to load cargo are already marginally higher than for ships arriving end of October, the Shanghai broker added.

"November arrivals are paying $5.40 a tonne," the Shanghai broker said. By comparison, the latest charter concluded for an end-October arrival was fixed at $5.05 per tonne, the broker said.

Rates were trending lower on Thursday after a choppy week.

"We are nearly at the bottom of the market with rates at $5 per tonne," the Singapore broker said.

Charter rates for the Western Australia-China route .BAWB were down to $5.19 per tonne on Wednesday, the lowest since Sept. 15, against $5.70 per tonne a week ago.

Rates for the Brazil-China route .BATB fell to $11.49 per tonne on Wednesday, compared with $12.10 per tonne the same day last week.

Panamax rates for a north Pacific round-trip voyage .BPHJ were around $6,550 per day on Wednesday, up from $6,275 per day on last Wednesday, but falling since hitting $6,707 on Sept. 12, the highest since Aug. 27.

Rates could recover on higher cargo volumes, Norwegian shipbroker Fearnley said on Wednesday.

Freight rates for smaller supramax vessels were slightly down this week, Fearnley said in a note.

The Baltic Exchange's main sea freight index .BADI fell to 787 on Wednesday, from 841 last Wednesday.

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