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.

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