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Shortsea operators miss seasonal lift

Date: 11/09/2013

For shortsea general cargo and mini-bulkers, this year has not seen the normal seasonal rush to fix, which could lift rates.

Owners and operators of shortsea general cargo and mini-bulk tonnage in Europe look increasingly exposed as the northern summer holiday season approaches. Operators have not managed to push up freights in most trades as the usual fixing rush for cargoes ahead of the holidays was lacking momentum, brokers say.

Usually employment opportunities and vessel earnings tend to improve around this time of the year, helping shipowners ride out the summer lull owing to plant closures or output reductions by large shippers from the steel and aggregates sectors.

UK broker HC Shipping & Chartering noted in its latest weekly comment that excessive tonnage supply prevented any meaningful gains towards the end of the second quarter. Cargo fixing activity was brisk last week, “but still not enough to really tip the balance and viewed as a whole, rates didn’t actually move that much”, the Hull-based firm said. 

The underlying sentiment in the market remains subdued “with expectation limited to more of the same”, it said, noting that the best opportunities for shipowners are still available in the Baltic and Black seas, while conditions in the western Mediterranean, northwest Africa, and southern Spain remain extremely challenging.

Norwegian broker Norbroker Shipping & Trading noted that the recent spike in loading activity was largely covered by long-term contracts of affreightment, thus eluding many vessels deployed in the spot market. There is still a “substantial number of idle tonnage both conventional and self-discharging units,” it warned.

Any gains in freight rates seem to have been offset by rising fuel prices last week, with Norbroker leaving its estimates for time charter equivalent earnings on typical north European round voyages unchanged at €1,900($2,477)/day for 3,500dwt type vessels and at €2,100/day for the bigger 6,500dwt types.

From St Petersburg, 3,000 tonnes of flat steel product were lifted for delivery in Rotterdam for €20/tonne, while grain shipments from the lower Baltic region to Ireland were covered at €20.50/tonne. A 4,000-tonne load of steel scrap ex-United Kingdom to Portugal was fetching last done levels of €18.50/tonne. One of the busiest commodity sectors recently has been construction materials like split and aggregates, brokers said. 


Source: Fairplay 

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