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Asia Dry Bulk-Capesize rates to climb on bad weather delays, more cargo

Published 07/07/2016, 06:39 pm
Updated 07/07/2016, 06:40 pm
© Reuters.  Asia Dry Bulk-Capesize rates to climb on bad weather delays, more cargo
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* Brazil-China rates hit seven-month high on thin tonnage numbers

* Typhoon Nepartak likely to cause delays, disrupt sailing schedule - brokers

By Keith Wallis

SINGAPORE, July 7 (Reuters) - Freight rates for large capesize dry cargo ships on key Asian routes could move higher next week on a potential ship shortage, higher cargo volumes and storms in China that could disrupt sailing schedules leading charterers to scramble to fix replacement tonnage, ship brokers said.

"We do not have a lot of ships available off Brazil to load cargo at the end of July. That will likely support freight rates," said a Shanghai-based capesize broker.

That came as capesize rates from Brazil to China hit a seven-month high on July 4.

"Hopefully, rates will climb up to near $10 a tonne," the broker added.

The Big Three Australian miners - Rio Tinto (LON:RIO) RIO.AX , BHP Billiton (LON:BLT) BHP.AX and Fortescue Metals Group FMG.AX - have largely been absent from the spot-chartering market this week after freight rates climbed to a three-week high on Monday, although they have subsequently slipped.

"When the market is hot, miners are always inclined to wait for rates to fall," the broker said.

That has fuelled sentiment that miners will return to the market next week with a raft of new cargo requirements.

Bad weather in China during the weekend caused by super typhoon Nepartak is likely to cause port congestion and unloading delays, which would affect vessels while they try to fulfill their next charter. That would force charterers to pay higher rates to fix alternative vessels, brokers said.

"Right now the market is falling, but it will be a bit firmer next week. The typhoon will create delays," said a Singapore-based capesize broker.

"We should see rates pick-up next week," the Singapore broker said.

Capesize charter rates for Western Australia-China .BAWB climbed to $4.63 per tonne on Wednesday, up from $4.51 per tonne last week. Rates rose to $4.78 per tonne on July 4, the highest since June 15.

Freight rates from Brazil to China .BATB hit $9.49 per tonne on Wednesday compared with $9.37 per tonne the previous week. They soared to $9.71 per tonne on July 4, the highest since Dec. 2.

Charter rates for smaller panamax vessels for a north Pacific round-trip voyage .BPHJ jumped to $5,822 per day on Wednesday, from $5,153 per day on the same day last week.

There was stronger sentiment this week on all panamax routes with firm rates on Asian trades, Norwegian ship broker Fearnley said in a note on Wednesday.

Freight rates in the Far East for smaller supramax vessels held steady on positive sentiment, brokers said.

The Baltic Exchange's main sea freight index .BADI rose to 694 on Wednesday from 640 last week.

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