* Poor rates lead owners to lay-up 6-7 capesize ships -broker
* Capesize market “pretty grim” -broker
* Panamax rates likely to fall on increased tonnage -broker
By Keith Wallis
SINGAPORE, March 19 (Reuters) - Rates for capesize bulk carriers, which have been close to six-year lows for the last two months, show little sign of improvement as a tonnage glut and scarcity of cargo continue to weigh on the market, brokers said.
Owners’ gloom about the state of the capesize market has led several operators to put their 180,000 dwt (deadweight tonne) capesize vessels in “hot lay-up”, a Singapore-based capesize broker said on Thursday.
That is where ships are anchored, onboard equipment including engines partially mothballed and the crew is cut to save costs for an extended period.
“There are six or seven ships we know about,” the broker added. That indicated those owners saw little prospect of a significant improvement in the capesize market for six to nine months, the broker said.
Average daily capesize freight rates have been below daily operating costs since mid-December, data from British shipping services firm Clarkson showed.
“The capesize market is pretty grim,” the Singapore broker said. Iron ore miners including Rio Tinto, BHP Billiton and Vale are still chartering vessels but fixtures are fewer, he said.
Cargo volumes from Brazil and Australia, which normally rise in the second quarter on better weather, will not increase because both countries experienced dry conditions in the first quarter, Norwegian ship broker Fearnley said in a weekly research note on Wednesday.
Charter rates for the Western Australia-China route hovered around $4.42 per tonne on Wednesday, virtually unchanged from a week earlier. Rates are still close to $4.12 per tonne reached on Jan. 12, the lowest since December 2008.
Rates for the Brazil-China route slipped to $10.10 per tonne on Wednesday, lower than $10.52 per tonne last week. Rates dropped to $9.65 per tonne on Jan. 9, the lowest since January 2009.
Freight rates in the smaller panamax market are likely to fall next week as available tonnage increases on all major routes in Asia, brokers said.
“Rates are definitely under pressure from a whole lot of tonnage and not much cargo,” a Singapore-based panamax broker said on Thursday.
Rates for a panamax transpacific voyage rose slightly to $5,400 on Wednesday, compared with $5,370 per day last Wednesday.
Freight rates for smaller supramax bulk carriers were largely flat this week around $8,000 per day for a round trip to India’s west coast, Fearnley said.
The Baltic Exchange’s main sea freight index closed up at 571 on Wednesday, against 565 last week. (Reporting By Keith Wallis; Editing by Prateek Chatterjee)