Shipping Rates Seen Bottoming on Demolitions: Freight Markets
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Freight rates are poised to rise after tumbling to a two-year low as owners of ships hauling coal and iron ore scrap the most vessels in at least 28 years.
A total of 38 capesizes, carriers three times the size of the Statue of Liberty, will be demolished this year, according to Clarkson Plc, the world’s biggest shipbroker. Charter costs should average $22,000 in 2011, almost four times today’s rate of $5,724, according to Philippe van den Abeele, the managing director of Castalia Fund Management (U.K.) Ltd., the London-based sub-adviser to a hedge fund trading shipping derivatives.