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Asia Dry Bulk-Capesize rates face mixed fortunes in dull cargo market

Published 10/12/2015, 06:59 pm
Updated 10/12/2015, 07:00 pm
© Reuters.  Asia Dry Bulk-Capesize rates face mixed fortunes in dull cargo market
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* Brazilian freight rates to firm on limited tonnage -broker

* Australian rates to fall on lack of cargo -broker

By Keith Wallis

SINGAPORE, Dec 10 (Reuters) - The market for capesize bulk carriers is likely to be a tale of two oceans next week, with rates in the Pacific coming under further pressure due to a lack of cargo, while Atlantic rates could continue to rise on a tonnage shortage, brokers said on Thursday.

"Rates from Brazil are still going to push up because tonnage is quite tight," a Singapore-based capesize broker said on Thursday.

Brazilian miner Vale VALE5.SA and operators such as Hong Kong's Caravel Group and South Korea's Pan Ocean PAOC.OB concluded a raft of fixtures this week to haul iron ore from Tubarao to China, which supported freight rates, according to brokers and Reuters freight data.

"All the other trades are heading down," the broker added.

"It is only Rio Tinto (L:RIO) RIO.AX that has been picking up ships, taking a few ships each day," the broker said.

"BHP Billiton (L:BLT) BHP.AX hasn't been doing anything and Fortescue Metals FMG.AX won't have any charters until the end of December," the broker added.

BHP has curtailed iron ore exports due to equipment maintenance that was expected to finish this week, brokers said.

"I think the capesize market will be stable unless BHP pushes a huge amount of cargo into the market next week," a Shanghai-based capesize broker said on Thursday.

"The Pacific does not look good - there is no West Australian cargo. There are still too many vessels in the Pacific," the Shanghai broker said.

Freight rates are also under pressure from falling bunker prices, which dropped to a near 11-year low on Tuesday, and a poor freight derivatives market, brokers said. urn:newsml:reuters.com:*:nL3N13Y2T2

Owners with ships trading on the spot chartering market pay for their own bunker fuel so lower fuel prices subsidises freight rates, brokers said.

Capesize charter rates for the Western Australia-China route .BAWB slipped to $4.08 a tonne on Wednesday, down from $4.40 a tonne a week ago, the lowest since Nov. 20.

Rates for the Brazil-China route .BATB slipped to $9.29 a tonne on Wednesday, against $9.55 a tonne the same day last week, although they have been rising this week after dropping to $8.80 a tonne on Dec. 7.

Panamax rates for a north Pacific round-trip voyage .BPHJ nudged down to $3,050 per day on Wednesday, compared with $3,334 per day last Wednesday.

"The Far East is in the dark doldrums. (Panamaxes are) in a steady decline with reduced activity across the board," Norwegian ship broker Fearnley said in a note on Wednesday.

Freight rates for smaller supramax vessels are "lacklustre", Fearnley said.

The Baltic Exchange's main sea freight index .BADI dropped to 546 on Wednesday, from 590 the same day last week.

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