Concerns over China’s reduced appetite for coal has led RS Platou Markets to slice its capesize rate expectations and shift its outlook for the entire dry sector.
RS Platou Markets dimmed its rating on dry bulk from positive to neutral noting the second quarter had seen supply growth exceed demand improvements for the first time in over a year. In its latest quarterly report the finance house also downgraded some of the largest names in the sector, including capesize giant Knightsbridge and Danish owner Norden.
RS Platou Markets says it has lowered its previous rate guidance significantly due to lower demand growth, mainly due to reduced Chinese coal shipments.
RS Platou Markets is now projecting capesize rates of $20,000 to $22,000 daily in 2015 and 2016, down from the $29,000 daily it previously had chalked up.
RS Platou Markets also notes a fall in nickel ore and bauxite shipments from Indonesia due to a ban has contributed to the considerably weaker market in recent months.In the second quarter dry cargo demand enlarged by 5% year-on-year, while supply grew by 5.4%, the report said.
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