Shipping Poised to Drop After Two-Week Rally: Freight Markets
This article is for subscribers only.
The rebound that more than doubled commodity freight costs in two weeks is peaking as idled ships haul anchor and compete for cargoes of iron ore and coal.
There were 282 capesizes anchored worldwide March 14, down from 300 Feb. 26, data compiled by Bloomberg show. The glut will mean second-quarter costs of $10,000 a day, 27 percent less than prices in the forwards market, said Sverre Bjorn Svenning, the analyst at Fearnley Consultants A/S who correctly predicted the industry’s crash in 2008. Forward freight agreements, traded by brokers and used to hedge or bet on future shipping rates, were at $13,675 by 1:16 p.m. in London today.