Shipowners facing a lack of business in the Pacific Ocean covered more of their customers’ costs to get their vessels to the Atlantic.
Costs on the C11 journey for shipments to Europe from Asia fell to minus $1,046 a day today from $958 on Jan. 14, according to the Baltic Exchange in London. The rate went negative on Jan. 13, a first for any dry-bulk journey reported by the exchange which publishes daily assessments for more than 50 routes. Contributing to charter costs is more cost-effective for owners than sailing ships empty.
“The Pacific is not the place you want to be at the moment,” Nigel Prentis, director of research and consultancy at HSBC Shipping Services Ltd. in London, said today by phone.
Paying to rent your own ships is “fairly desperate and undermines everyone else trying to put on a braver face.” Pacific cargo volumes have plunged after the worst floods in 50 years in the Australian state of Queensland.
“Substantial damage” has been done to a rail line serving Peabody Energy Corp. and New Hope Corp. coal mines, the state’s Transport Minister Rachel Nolan said today. Repairs may take as long as three months, GrainCorp Ltd. said on its website today.
Flooding also affected the states of Victoria and New South Wales. Companies including Rio Tinto Group have invoked a legal clause allowing them to stop contracted sales. Between 5 million and 7 million metric tons of thermal coal to generate power, or about 1 percent of global exports, may be lost to the Queensland floods, Emmanuel Fages, a Paris-based analyst at Societe Generale SA, said in a report dated today. The region supplies half of all seaborne coking coal that’s used to make steel, according to Bank of America Merrill Lynch.