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Monday, 16 September 13
WHAT RECOVERY MEANS FOR THE CAPESIZE MARKET - COMMODORE RESEARCH


COALspot.com: The simple fact that capesize rates have been able to increase above the $9,000/mark and become much more responsive to changes in cargo volume is a very clear sign that the capesize market is in recovery.

Capesize rates will continue to wax and wane, though, and "recovery" does not mean rates will now simply go up.  But it does mean that rates now are able to rise on the strength of robust cargoes, which is very significant as during the first three quarters of last year this was certainly not the case. 

During most of the first three quarters of 2012, capesize rates were unable to escape the $3,000 and $9,000 cycle, with fluctuations largely driven by owners idling available Capes when rates approached roughly the $3,000/day level and returning vessels when rates approached approximately $9,000/day.

During this time, Cape rates were not as much fluctuating due to changes in cargo volume. as they were due to owners changing the spot availability of capesize vessels. Today, the capsize market is surely in recovery and rates are now sensitive to changes in cargo volume again. 

This is why rates have surged recently during the current period of Chinese iron ore re-stocking.  Capesize fleet growth has remained low for many months and has ushered in a period of recovery for the capesize market.  Capesize rates being able to surge on robust iron ore cargoes is recovery. 

This has only been able to occur due to many months of capesize fleet growth staying low.
By: Jeffrey Landsberg | Commodore Research & Consultancy

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.

Views expressed herein are personal views of the author and not that of COALspot.com. We welcome article submissions from experts in the areas of coal, mining, shipping, etc. To submit your articles please click here



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