According to Reuters, freight rates for large capesize dry cargo vessels on key Asian routes, have hit multi-month highs this week and are prediceted to continue to climb steadily higher on tight tonnage supply and buoyant cargo volumes, brokers said.
Rates on the capesize route from Brazil to China have surged, which can be explained by an increase in chartering activity by Brazilian iron ore major Vale and ship operators including Louis Dreyfus, according to ship brokers and chartering data on the Reuters Eikon terminal. Spot capsize charters , transporting iron ore surged to more than 40 last week, which is double compared with their January level, according to data from the Reuters Eikon terminal.
Norwegian ship broker Fearnleyhas confirmed that earnings are now around US$14 000 per day for a capesize round-trip voyage in the Pacific Ocean.
However, despite these encouraging findnings, analysts have urged that it is too soon to become optimistic about the dry bulk market.
According to Peter Sand, Chief Shipping Analyst at BIMCO, "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."
It is thought that high iron ore prices could prompt Chinese domestic producers to re-open shuttered mines, which could compete with imports.
Source: Reuters, reporting by Keith Wallis
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