In Dry Bulk Market,International Shipping News 25/01/2016
Capesize charter rates for the Western Australia-China route slipped to $2.90 a ton on Wednesday, from $2.95 a ton a week ago, with charterers offering $2.85 a ton for fixtures on Thursday.
Freight rates for capesize bulk carriers on key Asian routes, which have fallen to 16-1/2-year lows, are set to remain unchanged as some European and Asian owners idle ships on reduced cargo volumes, brokers said.
“It’s a similar feeling to last week – there is still no sign of freight rates going up and there is a very limited volume of cargo. There is no sign of seeing more cargo,” said a Shanghai capesize broker.
“A bottom in the market seems to have been reached by owners. Several have started to lay up or idle ships rather than trade them at a loss.”
With capesize rates down to levels not seen since mid-1999, 40-50 capesize vessels have been idled in Asian waters, according to a Singapore-based capesize broker.
Belgian owner Bocimar, which operates 22 capesize ships to haul iron ore and coal, confirmed several capesize ships have been idled and it is considering scrapping older vessels.
Star Bulk and Zhejiang Ocean Shipping Co. (ZOSCO) are among around seven capesize owners who have anchored vessels, brokers said.
Capesize rates for a transpacific voyage are around $2,000 a day, the Singapore broker said. That compared with daily operating costs of about $7,300 per day, according to accountancy firm Moore Stephens.
Norwegian ship broker Fearnley said in a note on Wednesday that idling or lay-up was now the real alternative to sailing even for owners of modern tonnage.
With capesize rates below $3,000 per day, owners are expected to cut their losses and scrap older vessels, said Ralph Leszczynski, head of research at ship broker Banchero Costa in Singapore.
“I expect a record level of demolition this year. As there is no second hand market for capesizes over 10 years old, or for China-built capesizes in general, those ships will get scrapped,” he said.
Source: Reuters
