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Tuesday, 20 August 13
CAPESIZE RATES MORE SENSITIVE TO DEMAND - COMMODORE RESEARCH & CONSULTANCY


COALspot.com : Approximately 71.50 million tons of iron ore is now stockpiled at Chinese ports, 900,000 tons (-1%) less than a week ago, Commodore Research & Consultancy said in its latest report. 

Chinese iron ore port stockpiles have now fallen to their lowest level since May and are 26.6 million tons (-27%) lower than where they stood a year ago.  The historically low level of iron ore stockpiled at Chinese ports is very encouraging, and has been a contributing factor behind the strength in demand for imported iron ore cargoes and recent surge in cape size freight rates, said Commodore Research & Consultancy.

Commodore Research & Consultancy  further said in its research report,  23 cape size vessels were chartered to haul iron ore in the spot market last week (all of the vessels were chartered to deliver iron ore to Chinese buyers).  The last seven weeks have seen an average of 22.5 cape size vessels chartered to haul iron ore, with each week seeing at least 20 cape size vessels chartered to haul iron ore.  Prior to the last seven weeks, this year had seen an average of only 15.5 cape size vessels chartered to haul iron ore.

The consistently large amount of cape size vessels being chartered to haul iron ore cargoes (predominantly to Chinese buyers), combined with cape size fleet growth remaining relatively low, has caused spot cape size availability to become much tighter as we have predicted.  This tightness helped cape size rates find significant support  on Wednesday and Thursday.  Going forward, we continue to believe that there will be brief periods where spot availability of cape size vessels will be very tight and will lead to short-term spikes in Cape rates that will exceed $1,000 per day.  Much lower cape size fleet growth this year has now allowed the market to re-enter a phase where cape size rates are much more sensitive to changes in cargo volume and spot demand for available cape size vessels, Commodore Research & Consultancy said.

Commodore Research & Consultancy forecasts, rates, of course, will continue to decrease at times, but overall prospects for cape size rates are encouraging.

About Commodore Research & Consultancy
Commodore Research & Consultancy is an independent New York City-based consultancy that focuses on the global demand, supply, and seaborne trade of industrial and agricultural commodities, with a particular focus on China.  Commodore Research & Consultancy's analysts handle a wide variety of consulting requests and custom reports.  Commodore Research & Consultancy also offers two standard report subscriptions (Dry Bulk Report Subscription and China Report Subscription).

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