The meaning:
Capesize ships are cargo ships originally too large to transit the Suez Canal (i.e., larger than both Panamax and Suezmax vessels). To travel between oceans, such vessels used to have to pass either the Cape of Good Hope or Cape Horn. Vessels this size can now transit the Suez Canal as long as they meet the draft restriction (18.91m as of 2008). So, both “capes” baptized this ship configuration.
Capesize vessels are typically above 150,000 long tons deadweight (DWT), and ships in this class include VLCC and ULCC supertankers and bulk carrier transporting coal, ore, and other commodity raw materials. The term "capesize" is most commonly used to describe bulk carriers rather than tankers. A standard capesize bulker is around 175,000 DWT, although larger ships (normally dedicated to ore transportation) have been built, up to 400,000 DWT. The large dimensions and deep drafts of such vessels mean that only the largest deep water terminals can accommodate them.
Global crisis and freights prices meltdown
While rates continue to plunge, capesize owners find themselves into two camps. One group, including a large proportion of Asian owners, is prepared to still play the market, fixing time charter deals that at least pay the cost of vessel insurance.
Owners in the other group have preferred to park their vessels in an attempt to ride out the worst of the storm. “Owners in the first group are prepared to accept lower rates to keep their crews and ships active,” one Hong Kong broker said. “The overriding consideration is to keep vessels operating to provide mental stimulation for the crews by keeping them busy.”
The broker pointed out that owners in the second camp hoped that by parking vessels it will help rates to rise by creating a psychological shortage of ships. “But at the end of the day there’s still plenty of tonnage out there,” he said.
Owners in the other group have preferred to park their vessels in an attempt to ride out the worst of the storm. “Owners in the first group are prepared to accept lower rates to keep their crews and ships active,” one Hong Kong broker said. “The overriding consideration is to keep vessels operating to provide mental stimulation for the crews by keeping them busy.”
The broker pointed out that owners in the second camp hoped that by parking vessels it will help rates to rise by creating a psychological shortage of ships. “But at the end of the day there’s still plenty of tonnage out there,” he said.
Another Hong Kong broker discounted suggestions that owners were offering their ships for free provided charterers pay insurance and crew costs. “There are no sophisticated charterers, it’s a straightforward cash transaction based on a daily rate. The fact charter rates only cover insurance or crew costs is incidental,” he said.
The dilemma: to fix or lay-up
This came in response to latest November´08 days, fixing by Cargill of a Mitsui OSK Lines capesize relet at just $1,000 per day. At the same time, the average of the four time charter rates remained in freefall, dropping by around $1,000 in a week to close the week at $2,425 per day.
The dilemma: to fix or lay-up
This came in response to latest November´08 days, fixing by Cargill of a Mitsui OSK Lines capesize relet at just $1,000 per day. At the same time, the average of the four time charter rates remained in freefall, dropping by around $1,000 in a week to close the week at $2,425 per day.
Recent spot and time charter deals have soaked up maybe 10% of the ships that are on the availability list. So it helps, but there is a long way still to go,” said one of the Hong Kong brokers. “Traders are fixing some iron ore cargoes into China so they can reduce the average cost of their inventories. But that’s about it.” The broker pointed out that there was a surge in paper rates for the fourth quarter 2009 contract last Thursday. “The optimists thought it looked like the market was starting to pick up. But to others it looked the work of speculators and the positive sentiment quickly died,” he said. Fearnleys said the 176,000 dwt, 2003-built CSK Fortune was fixed by Oldendorff for a fronthaul voyage from Brazil to China at $5,750 per day with a $175,000 ballast bonus, but the broker said the bonus did not cover the ballast costs.
The Norwegian broker added: “On steam coal, South Korea is the only light we see, with month-on-month volumes up by over 13%, though this only benefits the smaller capesize vessels due to port restrictions at the discharge port.”
Based on Keith Wallis´article.
