Freight rates retreat

Freight rates in the capesize segment continued to slide Thursday but, unlike other sub-sectors of the drybulk market, are still higher than levels seen a year ago.
GHS said FFAs have been selling off as well and noted 2015 cape contracts are close to falling below the $20,000 mark for the first time since early February.

GHS said FFAs have been selling off as well and noted 2015 cape contracts are close to falling below the $20,000 mark for the first time since early February.

According to Global Hunter Securities (GHS) tonnage trading spot is fetching $14,100 per day, which represents a daily decline of nearly 5%.

In a client briefing the investment bank pointed out that capesize bulkers were commanding day rates of approximately $7,000 on average 12 months prior.

“Spot rates have been stuck in a pattern, unable to break away from the low-to-mid teens,” added equity analyst Omar Nokta in the report.

“The iron ore trade remains a bright spot, which has continued to keep capesize rates above year-ago levels; however, the other segments are all below earnings of a year ago.”

The researcher noted that panamaxes, supramaxes and handysizes trading spot are seeing day rates of around $5,300, $8,000 and $6,900 on average, respectively.

Twelve months ago the same respective sub-sectors of the drybulk segment reported daily earnings of $6,600, $9,400 and $7,800 on average.

Several equity analysts and industry forecasters contacted by TradeWinds about the downward trend described it as “troubling” but said there may be a silver lining in the clouds for investors.

Lacklustre rates have taken a toll on US-quoted bulker stocks in recent months but many are confident a rally will occur in the second-half, which is why some are urging clients to take advantage of the decline by accumulating shares of certain “well capitalised” owners.

Earlier this week Noah Parquette, an equity analyst at Canaacord Genuity, initiated research coverage of the dry-bulk market and stamped shares of Navios Maritime Holdings, Paragon Shipping, Safe Bulkers and Star Bulk Carriers with “buy” ratings.

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