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Eagle Bulk sees shipping rates at record low
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Wednesday, 17 Oct 2012

Bloomberg Business Week reported that the biggest slump in Indian iron ore exports on record is driving rates for ships hauling the cargoes to the lowest since at least 2005, extending losses for Eagle Bulk Shipping Inc and other owners.

Supramaxes, each hauling enough ore to make about 33,000 metric tonnes of steel, will earn an average of USD 8,500 a day in 2013, 15% less than this year, based on forward freight agreements traded by brokers and used to bet on shipping costs. That’s 13% less than New York based Eagle Bulk, the largest US owner of the ships.

Goa, India’s top exporting state, banned all production last month to curb illegal mining, and shipments from the world’s fourth largest supplier will decline 36% this year, according to Clarkson Plc, the biggest shipbroker. Supramaxes take about 40% of the nation’s cargo, Drewry Maritime Research estimates. That’s curbing demand at a time when owners are contending with record fleet capacity and ore prices are slumping because of weaker global consumption.

Mr Marc Pauchet an analyst at ACM Shipping Group Plc a London based shipbroker said that “The loss of Indian iron ore is eating away at Supramax demand. In this environment, every lost cargo hurts.”

The company operates a fleet of 45 Supramaxes, 45% of which compete in the single voyage market and the rest on longer-term charters. Eagle Bulk will report net losses of $4.84 a share for this year and USD 4.49 for 2013, based on the median of seven analyst estimates compiled by Bloomberg. Its shares dropped 17% to USD 3.12 this year and will reach $1.83 in 12 months, the average of five forecasts shows.

Source - Bloomberg


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