Capesize Freight Rates Likely to Improve on Increased Coking Coal Exports from Australia

The cargo ship owners are likely to see a silver lining in the next week amid gloomy environment.

Freight rates of capesize vessels are expected to rise marginally in the next week due to increased freight activity, especially across the key Asian routes. Coal cargoes, in capesize vessels, are going to increase the next week as shipments of Coking coal exports from Australia will increase.

The recent fall in Australian Coking coal prices has increased the quantum of import bookings by buyers in Asian regions, especially in China and India.

However, the overall situation of the cargo shipping industry continues to be lackluster, with over-supply of vessels against demand. Freight rates have thus remained unmoved.

Current freight rates (coal cargoes)

Freights in USD/MT
Source: SteelMint Research

Current freight rates (iron ore cargoes)

Freights in USD/MT
Source: SteelMint Research

The Baltic Dry Index was recorded at 601 points as on 26th May’16.  The index is a general indicator of the global freight rate movements in respect to all classes of cargo vessels, transporting all types of commodities, including coal and iron ore.