A surge in capesize rates last week has raised hopes the seeds of a recovery are being sewn.

    Reconstruction work in Japan coupled with heavy ship scrapping point to better times ahead, according to Lorentzen & Stemoco.

    Nicolai Hansteen, a dry-cargo researcher at the Norwegian broker, says he is noticing signs of a “fundamental recovery”.

    “Looking over the next 12 to 18 months, we are starting to see a better tonnage balance,” he said.

    Hansteen says the recent climb in the capesize market was started by "impressive" iron ore and coal shipments from Australia into Japan, which was hit by an earthquake and tsunami in April. This has been followed by improvements in the Atlantic in the past few days.

    He notes utilisation is now at 88% to 89%, close to the important psychological level of 90% which marks the difference between a sluggish and a firmer market.

    Capesize rates climbed to around $24,000 per day.

    Hansteen, who cautions a recovery will take time, says around 60 capesizes have been scrapped to date in 2011. 
 

(source:asiasis)