John Kemp

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Freight rates extend gains

May 29, 2009

Freight rates continue to rise sharply, led by strong increases for the largest capesize bulk carriers on the main iron ore routes from Brazil (C3) and Western Australia (C5) to China. 
 
While rates are still far below the levels that prevailed during the boom years of 2007 and 2008, they look high by the standards of the previous decade.  

 
Moreover, the number of vessels queued off Australia’s massive Newcastle coal loading terminal waiting to load coal bound for China and other destinations has risen to 35, from around 15 in the middle of Feb. 
 
Newcastle-operator Port Waratah Coal Services (PWCS) recently cut loading allocations for May and Jun in a bid to reduce shipping queues. 
 
Officially, queues have been blamed on logistics handling issues and weather-related delays, rather than heavy demand from Asian markets. But the weather has not been especially poor this autumn.  Instead, too many vessels have been arriving for the port’s ability to shift coal from the rails onto vessels, lengthening queues.

  • About John

    "John joined Reuters in 2008 as one of its first financial columnists, specialising in commodities and energy. While his main focus is on oil markets, he has written broadly on the emergence of commodities as an asset class, regulatory issues and macroeconomic themes. Before joining Reuters, John spent seven years as a senior analyst for Sempra Commodities (now part of JP Morgan) covering base metals and crude oil. Previously, he worked as an analyst on world trade, banking and financial regulation for consultancy Oxford Analytica."
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