Bloomberg News

Grain Carrier Rates Advance as Bookings Gain 47% in Week

April 24, 2012

Rates for ships that haul dry-bulk cargoes such as grain and coal advanced as demand to hire the vessels increased.

Bookings to take grain from South America gained 47 percent from the previous week, according to Wells Fargo Securities LLC. Returns for Panamaxes, the largest ships able to transit the Panama Canal, rose for an 11th straight session, the longest winning streak since March 26, according to the Baltic Exchange, a London-based assessor of freight costs.

Ship owners will have to contend with an increase in the dry-bulk fleet of 13.4 percent this year and 6.2 percent in 2013, according to a Wells Fargo report published today. Growth in the seaborne dry-bulk trade will slow to 4 percent this year from 5 percent in 2011, said Wells Fargo, citing data from Clarkson Research Services, a unit of the world’s largest shipbroker.

“We expect overall demand growth to remain relatively modest and insufficient to absorb the oncoming supply of vessels,” analysts led by New York-based Michael Webber said in the report.

Panamax rates gained 4.9 percent to $13,008 a day, according to Baltic Exchange data. That was the highest price in four months. Rates for Supramaxes, about 25 percent smaller than Panamaxes, gained 2.2 percent to $11,162, the highest price since Jan. 10. Handysizes, the smallest vessels tracked by the gauge, added 0.9 percent to $8,617.

Hire costs for Capesize vessels, the largest of the four ship sizes that are tracked by the gauge, were little changed at $6,542 a day, the data showed. The Baltic Dry Index increased 2.4 percent to 1,116 today, according to the exchange. That was the highest level since Jan. 11.

To contact the reporter on this story: Rob Sheridan in London at rsheridan6@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net


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