Capes fall over Christmas

Capesize rates came down over the festive season and with flooding impacting exports from Brazil and Australia the signs are for a lower market at the start of 2014.
Capesizes: Down over Christmas.

Capesizes: Down over Christmas.

The first Baltic Exchange report of the year shows earnings for the vessels slipped from $39,000 daily on Christmas Eve to $35,300 daily today.

As TradeWinds reported over the holidays, heavy rains led Vale to chop iron ore shipment expectations out of Tuburao, while major Australian iron ore export hubs were closed due to a cyclone.

Omar Nokta of Global Hunter Securities said in a note to clients today: “Charter rates are expected to continue seeing pressure with the Q1 2014 FFA contract trading around $16,000/day and the January 2014 contract at $21,000/day.”

He explains the force majeure declared by Vale on almost four million tons of iron ore is equivalent to 23 capesize cargoes.

Nokta notes the first three months of the year are often the weakest for the capesize market.

Capesizes were earnings $5,000 daily at this stage in 2013, Global Hunter’s figures show.

  • Cyclone Hedland bound

    Global iron ore supplies are set for further disruption as Australia’s Port Hedland prepares for the arrival of a major cyclone.
  • Tuburao ore exports hit

    Vale has declared force majeure on several iron ore sales contracts as Brazil’s threatens to impact the capesize bulker market.
  • Curtain call

    Freight rates for bulkers and tankers trading in the spot market softened in the final leg of 2013 due to the holiday slowdown but daily averages are still well above levels seen 12 months ago.
  • All in the family

    China Shipping Development’s CS Bulk arm has struck a deal to charter-in 21 panamax and handymax bulkers from a sister company in the China Shipping group.
  • Public money drives prices

    Clarksons has blamed the flood of public money into the shipping industry this year for driving up asset prices in the dry cargo market.