Thursday, December 11, 2008
Capesize makes the most of ‘slight glimmer of hope’
Thursday 11 December 2008
CAPESIZE rates in the physical market have more than doubled from their record low last week due to an increase in cargo flows and paper contract rates, writes Liz McCarthy.
The average time charter rate yesterday reached $5,029 per day, more than double the record low of $2,316 reported by the Baltic Exchange on December 2.
ICAP Shipping said in its daily report that there “was a slight glimmer of hope as capesize levels on paper improved slightly”, which had led to more interest on the period market.
The increase in the capesize index helped to support a third consecutive rise in the Baltic Dry Index yesterday, which gained 12 points to 691.
The dry bulk derivatives capesize first quarter contract yesterday was trading at $12,125, according to data from Oslo-based Imarex NOS. This implies that traders expect capesize rates will double again from current spot rates.
“There’s been a reasonable amount of spot iron ore flow” pushing up the cost of hiring a capesize, said Michael Gaylard, strategic director at London-based Freight Investor Services.
Australian miner Rio Tinto yesterday fixed two spot vessels to ship iron ore from Dampier to Qindao between December 20-30.
The iron ore producer chartered the 169,200 dwt, 2002-built Paschalis Dat $4.15 per tonne and the 150,108 dwt, 1991-built Go Pataro at $4.20 per tonne.
Meanwhile, fellow Australian miner BHP Billiton fixed the 75,323 dwt, 2001-built Nordelbe for delivery in Hong Kong and redelivery in South Africa via Western Australia for $3,500 per day.
Brokers noted a steady number of shipments of iron ore from India to China, as charterers seek to take advantage of a recent cut in Indian iron ore export taxes.
The Baltic Exchange yesterday reported nine India-China fixtures, including four panamax vessels, with rates between $2,500-$10,400 per day.
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