As the average length of journey increases, partly due to port congestion in China, soaking up capacity and pushing up spot rates, shipowners will likely be enjoying high freight rates until the end of the year, Peter Sand, Chief Shipping Analyst, BIMCO said in his latest Shipping News Of The Week (SNOW).

The average weighted time-charter for capesize reached $74,786 per day at the close on the Baltic Exchange on September 29, a gain of over 8 percent from the previous session. That is the highest for the 180,000 DWT assessment launched in 2014, Lloyd’s List said in its daily update.

Baltic Dry Index, mirroring the jump in capesize rally, moved up to a 13-year high of 9,018 on September 29.

Iron ore spot freight rates from Western Australia to Qingdao, China zoomed 163 percent to $21.82 per tonne on September 28 compared to the same time last year. “For a very large ore carrying Capesize ship transporting 200,000 tonnes of iron ore, this represents an increase in freight revenue from $1.66 million one year ago to $4.36 million on September 28, “ Sand wrote in his note.

Iron ore spot freight rates from Tubarão in Brazil to Qingdao in China are up 112 percent compared with September 28 last year and up 174% since the start of this year.

“As we approach what is seasonally the strongest time of year for dry bulk, it looks like owners and operators will continue to enjoy high spot freight rates until at least the end of the year,” Sand said.

Given the steep rise in rates in recent weeks, observers wonder if the market could run up to the $100,000 per day mark, Lloyd’s said.

Source : ITLN