Freight rates for Capesize ships may have bottomed because demand for the carriers of iron ore and coal is strengthening, said DNB Bank ASA.
Rates for Capesizes on the Brazil-to-China iron-ore route rose for a fourth session yesterday after 23 declines in a row, according to data from the Baltic Exchange in London. Rents for the ships gained on the Australia-to-China voyage after reaching the lowest level since May on Feb. 3.
“The iron-ore majors came into the market yesterday, and with more fresh cargo, it’s hard to ignore the feeling that the market has bottomed, which will increase owners’ bargaining power,” Nicolay Dyvik, an Oslo-based analyst at DNB Equity Research, wrote in an e-mailed note today.
Still, average daily Capesize rates slid for a 30th session yesterday, declining 0.7 percent to $5,214, according to the Baltic Exchange in London. The ships are losing $7,342 a day on the Asia-to-Europe route, the worst return since at least 1999, exchange data show.
The Baltic Dry Index, a broader gauge of raw-materials shipping costs that includes smaller vessels, rose yesterday for the first time since Dec. 12. Ship owners dropped anchor rather than accept unprofitable rates, Natasha Boyden, an analyst at Cantor Fitzgerald LP, said in a report yesterday.
Australia and Brazil are the world’s two biggest exporters of iron ore, a steelmaking raw material. China is the largest global steel producer.