December 03, 2008

Capesize coal and iron ore rates hit new all time high

Platts reported that Capesize coal and iron ore rates have hit new all time highs, driven by coal and iron ore trades and charterers taking ships on long term, period business and that brokers are predicting that the market could go higher still. As per report, Capesize iron ore rates on the key iron ore route of Brazil to China have hit a new all time high of USD 65.75 per tonne to USD 66 per tonne, basis for 160,000 tonnes parcel smashing the previous record of USD 59 per tonne set in late May 2007.

The report said that Jinan Steel has fixed a 160,000 tonnes cargo from Ponta da Madeira to Qingdao, with a loading window of September 10th to September 19th at USD 66 per tonne on a yet to be nominated Transfield ship. In addition, Pioneer Metals reportedly paid USD 62 per tonne for a 170,000 tonnes cargo from Guaiba Island to Qingdao for September 27th to September 30th loading, which equates to USD 65.88 per tonne for the standard cargo size of 160,000 on this route.

The report cited a Capesize broker as saying that "Rates have already broken the records and at this time of year rates typically rise for the remainder of the third quarter and throughout most of the fourth quarter. I don't see anything on the horizon, other than charterers holding back from time to time and seasonal factors, that will stop this market going higher.”