Asia Dry Bulk-Capesize Rates Mixed on Uncertainty

Capesize rates slide after hitting 5-month high.

Rates for capesize bulk carriers eased this week after hitting their highest since December, and could come under pressure next week if charterers hold back cargoes, ship brokers said.

"So far, I can't see too much cargo in the market. Charterers are hoping rates are going to drop again," said a Shanghai-based ship broker on Thursday.

"Sentiment is not good," the broker added.

But the broker said average earnings were higher than the first quarter of the year.

Average earnings for a capesize vessel, which can carry around 170,000 tonnes of iron ore or coal, were almost $8,300 per day on May 15, compared with about $5,900 in the first quarter, according to figures from British shipping services firm Clarkson.

"Freight rates have found a new floor - I hope," a Singapore based capesize broker told Reuters on Thursday.

Charter rates for the Western Australia-China route were around $5 per tonne on Wednesday, down from $5.55 per tonne last week, which was the highest since Dec. 10, 2014. They have been hovering close to $4.12 reached on Jan. 12, the lowest since December 2008.

Rates for the Brazil-China route slipped to $11.85 per tonne on Wednesday, against $12.28 per tonne a week earlier. They hit $12.45 per tonne on May 14, the highest since Dec. 17, 2014. They dropped to $9.65 on Jan. 9, the lowest since January 2009.

Freight rates in the smaller panamax market could slip next week as charterers and ship owners face off against each other, a Singapore-based panamax broker said on Thursday.

"The cargo is there, but there is a lot of tonnage coming available," the broker said.

"Rates will physically start to come off tomorrow or early next week," the broker said.

Rates for a panamax transpacific voyage rebounded this week to $4,829 per day, up from $4,257 per day, and the highest since Mar. 30.

Freight rates for smaller supramax vessels were higher this week with charterers paying more than $6,000 per day for a Pacific round trip voyage, Norwegian ship broker Fearnley said in a weekly note on Wednesday.

The Baltic Exchange's main sea freight index closed down at 606 on Wednesday, compared with 634 last Wednesday.

Technical analysis showed the benchmark could retrace support at 609 in a week, before rising again towards resistance at 630.

Reporting by Keith Wallis