* Number of spot capesize cargoes double from January levels
* Pacific capesize earnings now around $14,000 per day -
* Supply side growth with new vessel deliveries could hurt
earnings - Bimco
By Keith Wallis
SINGAPORE, March 10 Freight rates for large
capesize dry cargo vessels on key Asian routes, which hit
multi-month highs this week, are set to jump further next week
on tight tonnage supply and buoyant cargo volumes, brokers said.
Rates on the capesize route from Brazil to China soared to
the highest level in nearly 18 months on Thursday, fuelled by
chartering activity by Brazilian iron ore major Vale
and ship operators including Louis Dreyfus,
according to ship brokers and chartering data on the Reuters
"I think we'll see rates continue to go up. The supply of
tonnage for April loading is very tight. Tonnage is tight
generally," a Singapore-based capesize broker said.
"It has been a surprise - rates increased further than we
thought," the broker added.
That came as the number of spot capesize charters, mainly to
transport iron ore, surged to more than 40 in the week ended
Thursday, which is double compared with January level, data on
the Reuters Eikon terminal showed.
Earnings are now around $14,000 per day for a capesize
round-trip voyage in the Pacific Ocean, Norwegian ship broker
Fearnley said in a note on Wednesday.
That compared with average daily earnings of $6,500 last
year, according to data from shipping services firm Clarkson.
But analysts sounded warnings on the outlook for the dry
"The continued slowdown in scrapping and the lower level of
demand in the first quarter, means the supply-side growth will
exceed the growth in demand on a short-term basis, and lead to
lower dry bulk earnings in that period," Peter Sand, chief
shipping analyst at shipping lobby group BIMCO, stated in a note
High iron ore prices could prompt Chinese domestic producers
to re-open shuttered mines, which could compete with imports,
said Ralph Leszczynski, head of research as shipbroker Banchero
Costa in Singapore.
Charter rates from Western Australia to China route
rose to $6.35 a tonne on Thursday, from $5.99 per tonne a week
earlier. They hit $6.49 per tonne on Tuesday, the highest since
Freight rates for the route from Brazil to China
climbed to $14.52 per tonne on Thursday, the highest since Sept.
21, 2015, from $11.42 per tonne the same day last week.
Charter rates for smaller panamax vessels for a north
Pacific round-trip voyage continued to surge, rising to
$10,390 per day on Thurday, the highest since Nov. 11, 2014,
from $9,170 per day last Thursday.
Rates in the Far East for supramax vessels rose to
$12,000-$13,000 per day for trips from South East Asia to China
this week, from around $10,500 per day last week.
The Baltic Exchange's main sea freight index climbed
to 1064 on Thursday from 904 last week.
(Reporting by Keith Wallis; Editing by Sherry Jacob-Phillips)