Rates for capesize dry bulk carriers increased by $6,167 last week, or 66%, to $15,516 per day driven primarily by iron ore shipments from Brazil. Commodore noted that 10 vessels, including nine capesizes where chartered on the spot market for Brazilian iron ore cargoes, four more than the week before and the highest weekly total since the start of July.
“Capesize rates have been able to rise by such a large amount so quickly, as vessel availability in both the Atlantic basin and Pacific basin have become tighter,” said Jeffrey Landsberg managing director of Commodore in a note to clients.
“Much more Brazilian iron ore will be exported during September through the end of the year, and capesize rates are set to rise to much higher levels this year.” Vale’s iron ore shipments are expected to rise to at least 176.3m tonnes in the second half of 2014, 22% more than the first half.
Miners in Australia are also increasing their exports of iron ore. "It is not just Vale increasing iron ore production -- all three of the major iron ore miners in Australia are also further increasing iron ore production through the end of this year,” he said.
While saying capesize had now found support and were set to rise to “much higher levels” Landsberg did not offer an opinion as to what quantum the expected rise would be.
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