Rates for capesize bulk carriers on key Asian routes face an uncertain week after coming off six-month highs on reduced chartering activity by mining companies including Vale, brokers said.
“Mining companies will want to pull the market back from its current levels, but they will be under pressure to fix early December dates to tie in tonnage for the Christmas-New Year holidays,” said a Singapore-based capesize broker.
Rates for voyages from Australia and Brazil to China softened on Wednesday but could rebound quickly if iron ore miners jump back into the market, the broker said.
“Chartering volumes have decreased a lot. It’s only really been BHP Billiton and operators that have been active this week,” said a second Singapore-based capesize broker.
BHP Billiton concluded five capesize fixtures in the past week, according to Reuters chartering data. Rio Tinto fixed one ship, while Fortescue Metals Group stayed out of the market. Operators, including Sinochart and Classic Maritime, chartered tonnage from Australia and Brazil, Reuters freight data showed.
Charterers were offering $23 per tonne for a voyage from Brazil to China on Thursday, the second broker added, a drop of $2 on the last concluded fixture on Wednesday.
“I am still optimistic. I would expect volumes to increase before Christmas. Charterers would want to lock in tonnage,” he said.
“The front haul activity has been steady, mainly represented by iron ore out of Brazil. West Australia iron ore activity has however been limited, having resulted in pressure on the Pacific rates,” Norwegian ship broker Fearnley said in a weekly note on Wednesday.
The value of freight derivatives had also fallen, Fearnley said. “These aspects are for sure resulting in more uncertainty amongst the owners.”
Rates for the Western Australia-China route slipped to $9.42 per tonne on Wednesday from $9.88 a week ago. Freight rates hit $9.91 per tonne on Oct. 4, the highest since April 2.
Freight rates for the Brazil-China route fell to $25 per tonne on Wednesday from $26.15 last week, close to March-end highs.
Rates in the smaller panamax market climbed as forecast for this week although they started to slip on Wednesday as owners started to become more pessimistic, Fearnley said.
Charters remained active but there was a sense the market was becoming oversupplied with tonnage, Fearnley said.
Rates for a panamax transpacific voyage climbed to $11,744 per day on Wednesday, up from $11,231 last week, although down from $11,880 earlier in the week – the highest since Feb. 26.
Freight rates for smaller supramax bulk carriers were faced with continued oversupply of tonnage that capped transpacific rates at $8,000 per day, brokers said.
The Baltic Exchange’s main sea freight index closed at 1,464 points on Wednesday compared with 1,428 points last week. Technical analysis showed the benchmark is expected to rise to 1,621 in a week, as it has broken a resistance at 1,409.