By Keith Wallis

SINGAPORE, Jan 28 (Reuters) – Freight charges for capesize bulk carriers on key Asian routes are prone to keep flat as vessel volumes outpace cargo demand and the approaching Chinese New Year vacation additional dampens chartering exercise, ship brokers mentioned on Thursday.

There is little hope of any enchancment in charges, which stay at close to 16-1/2-year lows, even after the Chinese New Year vacation which begins on Feb. 7, brokers mentioned.

Forward freight charges for March on the Australia-China capesize route are at ranges of $3 a tonne at present, a Shanghai-based capesize dealer mentioned.

“People don’t give much hope there at all. The market is flat and gloomy,” the dealer mentioned.

Shipowners have idled as much as 50 capesize ships in Asian waters slightly than sail ships at a loss as common every day freight charges are at ranges which can be about half that of every day working prices.

“I think you’ll see operators are going to struggle. The market is at rock bottom,” a Singapore-based capesize dealer mentioned.

That got here as ship dealer Banchero Costa (Bancosta) mentioned the capesize fleet would develop by 4 p.c in tonnage phrases this 12 months, whereas Chinese imports of iron ore and coal, the 2 staple cargoes for capesize ships, are forecast to fall, Clarkson mentioned.

China’s iron ore imports will drop to 919.2 million tonnes in 2016 from 924 million tonnes final 12 months, whereas coal imports will fall 8 p.c to 156.1 million tonnes this 12 months, Clarkson mentioned.

A brand new file degree of capesize scrapping is predicted this 12 months, after a file 14-15 million deadweight of capesize tonnage was bought for demolition final 12 months, mentioned Ralph Leszczynski, head of analysis at Bancosta in Singapore.

“The lack of long-term optimism will probably prompt even less older tonnage to be considered for scrapping,” mentioned a senior govt at a Singapore ship administration firm.

Capesize constitution charges for the Western Australia-China route nudged as much as $3 per tonne on Wednesday, from $2.90 a tonne every week in the past.

Rates for the Brazil-China route had been larger at $5.46 a tonne on Wednesday, in opposition to $5.35 a tonne on the identical day final week.

Panamax charges for a north Pacific round-trip voyage dropped to $2,118 per day on Wednesday, the bottom since January 2009, from $2,587 per day on the identical day final week.

“(There is) no where to hide in the Panamax market,” Norwegian ship dealer Fearnley mentioned in a be aware on Wednesday.

Freight charges for smaller supramax vessels dropped to round $2,500 per day for a voyage from Indonesia to India.

The Baltic Exchange’s predominant sea freight index dropped to a brand new all-time low of 337 on Wednesday from 358 the identical day final week. (Reporting by Keith Wallis; Editing by Biju Dwarakanath)

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