Capes slide further

Capesize rates added a fifth successive day of declines and are now 17% down over the past week.

Omar Nokta of Global Hunter Securities notes the fall in capesize spot earnings to $12,800 daily on Tuesday continues a trend that has seen them range-bound for the past month.

Bimco says the optimism that built up in the dry cargo market when rates improved in the second half of 2013 has now all but evaporated. But the association still expects earnings to pick up in the second half.

In a report, chief analyst Peter Sand said: “The world fleet is capable of catering to a much higher level of demand than it does today.

“This is what makes the road forward full of air pockets, with owners and operators trying to hit the optimum speed in a quest to utilise their ships better.”

After a flat couple of months, he says there is only some comfort in knowing the capesize average of $14,504 per day until the end of May is 158% over the figure for the same stretch in 2013.

Panamax rates for the first five months of 2014 are 22% up and supramaxes 28% to the good on a year-on-year basis. 

In a report issued yesterday, Sand wrote capesize rates for June and July will range between $12,000 daily and $22,000 per day.

Panamaxes will continue to feel the pressure at $4,000 to $9,000 per day, with supramaxes earning between $7,000 and $12,000, Sand says.