Capesize Rates Surge, Doubling in One Week to Reach $41,796
Capesize rates have experienced a remarkable upward trend since last Friday, with daily increases reaching unprecedented levels not seen in years. The Baltic Exchange reported a substantial leap of $7,410 yesterday, resulting in a more than twofold surge within one week, bringing the average cape spot rates to $41,796.
Jefferies noted in a recent client update that consistently strong volumes in long-haul Atlantic trades over the past three weeks have led to tightened vessel capacity, propelling rates to their latest highs.
Signal analysts observed a notable increase in the congestion of capes, reaching around 120 ships in recent weeks. According to a recent report from Arrow, the driving forces behind this surge resemble those that pushed cape earnings over $30,000 about a month ago, including a significant decline in tonnage supply in the Atlantic, robust West Africa bauxite shipments, and healthy iron ore volumes from Brazil.
Arrow emphasized the robust health of Capesize demand, measured in tonne-miles, which has seen an average increase of around 4% this year. Current dwt-miles also exceed seasonal norms.
Xclusiv Shipbrokers highlighted Beijing’s efforts to boost its economy through liquidity injections, particularly by accelerating bond issuance, as one of the contributing factors to the rally. They also pointed to the massive queues of ships outside South Africa’s struggling main bulk export terminals this month.
Shipfix analysts pointed to the notable surge in coal shipments, with weekly cargo order volumes for coal increasing by nearly 150% since the middle of October, reaching 2.7 million tonnes.
