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Asia Dry Bulk-Capesize rates to be pressured during China holidays

Published 01/10/2015, 06:55 pm
Updated 01/10/2015, 06:58 pm
© Reuters.  Asia Dry Bulk-Capesize rates to be pressured during China holidays
BADI
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* Weak holiday demand to pressure rates lower

* Rebound seen after China returns to market on Oct 8

* Rates could firm Nov through mid-Dec -broker

By Keith Wallis

SINGAPORE, Oct 1 (Reuters) - Freight rates for capesize bulk carriers could come under pressure next week as lower cargo volumes due to holidays in China thwart shipowners efforts to push rates higher, ship brokers said.

"There was a bit of a rush to fix earlier this week ahead of the holidays ... but it has been very quiet in the last couple of days," a Singapore-based capesize broker said on Thursday.

"We are seeing resistance. Owners are holding off fixing their vessels. Ships are stopping in South Africa on owners' expectations freight rates will rise," he added.

The dry bulk market generally this year has been hit by a drop in Chinese coal imports, shorter sailing distances and an increase in new vessel deliveries, ship brokers said.

Chinese coal imports fell 31 percent to under 140 million tonnes over the first eight months of the year, according to official customs data.

The broker said the market will bounce back up once China comes back from its week-long National Day holiday on Oct. 8.

"November we'll see a stronger market. People are still optimistic. Owners want to be sure they have ships available for the spike in rates, if there is one" he said.

Freight rates were trending slightly lower on Thursday from Wednesday's close with rates for a 180,000 deadweight tonne (dwt) for a voyage from Australia to China at around $5.80 per tonne, ship brokers said.

Charter rates for the Western Australia-China route .BAWB were around $5.87 per tonne on Wednesday, against $5.78 a tonne a week ago, but down from $6.20 per tonne on Sept. 28.

Rates for the Brazil-China route .BATB were down to $13.12 per tonne on Wednesday compared with $13.23 per tonne a week earlier.

Panamax rates for a north Pacific round-trip voyage .BPHJ fell to $6,141 per tonne on Wednesday from $6,529 per day the same day last week.

The panamax rates could also slide further due to a lack of cargoes during the Chinese holiday, with rates expected to firm in November through mid-December, a Singapore-based panamax broker said on Thursday.

Freight rates for smaller supramax vessels were around $5,500 per day for a Pacific roundtrip voyage in a market that was spiralling down, Norwegian ship broker Fearnley said in a note on Wednesday.

The Baltic Exchange's main sea freight index .BADI fell to 900 on Wednesday, down from 917 last week.

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