Capesize spot rates have slipped this week but a two-year time charter for a Greek shipowner has showed strength in the period market.
Cefo yesterday chartered the 176,300-dwt Alpha Confidence (built 2011), owned by Alpha Bulkers, for around two years, according to the Baltic Exchange.
A rate of $21,250 per day has been placed on the fixture, which compared with the $15,938 per day average in the spot market on Thursday.
Analysts at Clarksons Platou Securities say the spot market has been muted but period business has remained resilient to short term volatility.
They explain the two-year charter for a seven-year old ship at $21,250 suggests a still healthy internal rate of return of 12%.
Capesize rates slipped further to $15,574 per day on Friday. However, the historically strong fourth quarter is approaching.
Researchers at Braemar ACM calculate the fourth quarter has been the strongest in five of the past seven years.
Only once during that period, in 2015, has the fourth quarter been weaker than the previous three months, with the average outperformance 71%, the shipbroker said in a report.
“Judging by FFA pricing the market expects a similar performance this year,” it said.
“Over the course of 2018, Q4 paper has traded at an average premium of 20% over Q3, and whilst it has come off recently it did trade as high as $26,700 PER day towards the end of August.
“And we approach Q4 from a good place the market hasn't had a better Q2 or Q3 this decade.”
