Capes in profit

Skyrocketing capesize spot rates have entered positive territory for the first time this year.

Income is up 180% in June as average rates climbed to $14,500 daily today.

Greg Lewis, an analyst at Credit Suisse, said in a report: “While the market remains weak – all asset classes (capes have been the laggard) are now earning in excess of their daily operating cash break even costs – first time for capes since late last year.”

Today marks the 16 successive daily climb in the Baltic Dry Index, which Lewis notes is now up 43% over the period.

“Rate increases have been driven by China restocking iron ore inventories which has seen dayrate increases in both the Atlantic and Pacific basins,” Lewis said.

“Increased volumes from Brazil could see momentum maintained in dayrates.”

As TradeWinds reports today George Kalogeropoulos of Enterprises Shipping & Trading, which has 22 capesizes out of a total fleet of 75, says people have started to realise there is strength in the markets.

“I don’t believe it is temporary, there will certainly be some corrections. However, I feel we are past the worst and heading up,” he told TradeWinds.

“I think we are very close to hitting the $20,000 mark.”