Positive mood in the dry cargo market continues after strong showing last week.
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| The 176,000-dwt capesize bulker "Vogerunner" (built 2008) Photo: H Vogemann |
Capesize rates continue to gain ground having struck a four-year high on Friday 1/12.
Improvements in the sector are driving up the overall market with the Baltic Dry Index also pushing multi-year highs.
According to the Baltic Exchange, capesize rates climbed to $28,546 per day on Monday 4/12, with the BDI at 1,662 points.
Monday’s improvement added to a 12% rise last week which lifted the index to a three-year peak of 1,626 points.
Noah Parquette of Morgan Stanley says the period market is also going strong, with the one-year rate rising to $18,625 per day.
The physical market is being supported by strong sentiment in the paper market for early next year, according to analysts at Clarksons Platou Securities say.
Fotis Giannakoulis of Morgan Stanley says rising steel prices in China, low inventories and winter production cuts due to pollution controls keep supporting steel margins are pushing iron ore and freight rates higher.
He explains rates are likely to cool off during the next two or three months after capes have averaged $22,000 per day in the fourth quarter.
However, he has a positive read for next year. Fleet growth is set to fall by more than 50% coupled with higher Brazilian exports potentially pushing rates well above the $24,000 per day yearly average the bank is forecasting, he explains.