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Chinese demand for Iron Ore driving the Capesize market

By • Dec 9th, 2013 • Category: Dry Cargo

The Coracle Dry Cargo podcast for Dec 7, 2013 in association with The Baltic Exchange

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Thanks for downloading the dry cargo market report from Coracle Online and the Baltic Exchange for week ending Dec 7th 2013. This report looks at the Capesize and Panamax markets.

Starting with the Capesize sector and the week was fast moving for the big ships with rates rising sharply, largely underpinned by Chinese demand for iron ore. The majors were all evident in the market from West Australia and, in the middle of the week, rates to Qingdao began the day at $11.80 and closed at $13.50. Rates for BCI dates nudged $14 and one charterer needing a ship to make 13 December paid $14.25 for a 160,000 tonne 10% cargo.

Rates slipped as the week closed though, with one major booking tonnage for 24 December onwards at $13.25. Anglo American took seven ships from Saldanha Bay to Qingdao with four for December and three for early January, with the January rate at $20.75. Timecharter activity was less evident but the strength of the voyage market means rates should still be in the low to mid $30,000 daily range.

Brazil rates strengthened and there was talk that a 20-30 December 160,000 tonne 10% cargo was done from Tubarao to Qingdao at around $29.

The Atlantic remained very tight for tonnage and, further north, charterers conceded healthier numbers for both fronthaul and transatlantic rounds. A 179,000 tonner open Fos allegedly agreed $38,000 daily for a transatlantic round.

Moving to look at the Panamaxes and the Atlantic market tightened this week, with early ships disappearing rapidly and rates getting very strong. An 83,000 tonner fixed from San Ciprian for a trip via Hampton Roads and Brindisi with redelivery Gibraltar at $19,000 daily. However, a 76,000 tonner fixed towards the end of the week at $15,500 daily plus a $550,000 bonus for 8-12 December delivery US Gulf for a trip Skaw-Cape Passero. For fronthaul, the pressure has been for December cargoes from the US Gulf, with the peak at $20,000 daily and a million dollar bonus for the run east, though there was talk that a 76,000 tonner went at $19,250 daily with a $925,000 bonus for the run east for a 1-10 January cargo. There were those still cautious of a growing list of ships coming open on the Continent later this month, with some owners wanting to lock in at current rates.

Indonesia underpinned rates in the East, with demand still being significant. Stronger spot rates have impacted on period business, with rates now approaching the mid $13,000 daily range for Kamsarmaxes for one year with delivery in the East.

Thanks for listening