S&P brokers have been watching with eagle eyes to see if the dramatic fall in capesize rates – down nearly 50% from year-highs of $30,000 in the space of 10 days – will translate into falling prices for secondhand capes.
Buyers and sellers have been watching what the 14-year-old, 180,000 dwt Ocean Corona, built at Koyo Shipbuilding in Japan, would fetch after inviting offers on Tuesday. The price tag for the first cape sale in November has now been revealed and shows price levels are indeed slipping. The ship sold for $20.8m, significantly less than the usually conservative pricing portal VesselsValue says the ship is worth. VesselsValue has a price tag of $22.59m for the ship.
Just a couple of weeks ago when rates peaked at about $30,000 per day, the 12-year-old 177,000 dwt Cymona Iron, a scrubber-fitted bulker built at Shanghai Waigaoqiao fetched $27m.
Looking at demand growth from a tonne days perspective analysts at freight platform have reported a decreasing trend in recent days.
“The declining trend has now reached its lowest growth rate since the end of week 39, and it appears that November will introduce further downward pressure,” a recent report from Signal stated.
The China Iron and Steel Association said last week that domestic crude steel production may drop in Q4 as a result of mandatory production cuts together with regulations to control pollution during winter months.
“This along with the prevalent concern on China’s property market may keep iron ore demand subdued in the near future,” noted a recent freight report from HSBC.
