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A fifth of all capesizes now laid up

A fifth of all capesizes now laid up

New York: At least 20 percent of the vessels most commonly hired to haul coal and ore are sitting empty as steelmakers cut output and dwindling trade credit halts deliveries, Lorentzen & Stemoco A/S shipbroker Kjetil Sjuve told Bloomberg. Fifty to 100 so-called capesizes, each bigger than The Trump Building in New York, have been unable to find cargoes or their owners won't accept rental rates that have plunged 98 percent in five months, Sjuve said by phone. Normally about 250 such carriers compete for spot bookings, he said. There are simply no cargoes,'' Sjuve said from Oslo. "It's primarily the steel market but it's even more difficult due to financial markets and letters of credit in particular.'' ArcelorMittal, the world's biggest steelmaker, on Nov. 5 said its global output will decline by more than 30 percent. Cia. Vale do Rio Doce, the world's biggest iron-ore producer, last month said it will cut production.
Capesizes that were attracting rates of $233,988 a day as recently as June are now available for $5,293, according to the Baltic Exchange in London. That's about the same as the cost of paying for crew, insurance, maintenance and lubricants.
The number of empty capesizes in the spot market may climb to as many as 150 in the next two weeks, said Sjuve, who is a capesize broker. The precise number at anchor is ''very difficult to pinpoint'' because owners don't often announce it, he said.
Zodiac Maritime Agencies Ltd., the shipping line managed by Israel's billionaire Ofer family, said last month it was considering idling 20 of its largest ships. Ukraine's Industrial Carriers Inc. filed for bankruptcy protection last month and London-based Britannia Bulk Holdings Plc was placed into administration under U.K. insolvency laws.
The 12-member Bloomberg Dry Ships Index has plunged 76 percent from its peak in May, taking its combined market capitalization to $6.7 billion from $27.8 billion.  [10/11/08]


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