SHIPPING NEWS

Freight rates for large dry bulk carriers on key Asian routes are expected to fall next week after commodity firms booked discounts for China-bound vessels in late October, indicating a backwardated market structure. In the panamax market, rates were seen declining in the short term as unchartered vessels compete for limited work.

Capesize fixture rates on the key iron ore route into China from Western Australia edged higher to $10.81 on Wednesday from $10.05 a tonne last week.

South Korea's Hanjin booked a 160,000-ton vessel to China from Western Australia for loading between Oct. 20-29 for $10.70 a ton, indicating rates would likely stay under pressure in the short term.

''Activity in the capesize market continued to be volatile, driven by China's need for iron ore and pricing differentials between China's domestic supplies and imports,'' said Natalie Robertson, analyst at ANZ Global Markets.

''However trade is expected to slow towards the end of the week, as China prepares to celebrate Golden Week.''

Other China-bound rates were seen declining next week, including the route from Brazil's Tubarao to Qingdao, which was in backwardation for October.

Vale charted an LR2 ship on the Brazil-China route starting from Oct. 5-15 for $27.15 a ton, while Louis Dreyfus booked a similar vessel at a 40-cent discount by waiting 10 days longer.

Rates on the spot market for the Brazil-China route closed at $27.34 on Wednesday.

The Baltic Exchange's main sea freight index dropped 1.44 percent, or 36 points, from the previous session to 2,468 points.

In the panamax market, the Baltic's rate for vessels travelling via the transpacific route declined to $17,968 on Wednesday from $20,517 last week.

''Rates continued to soften and we still see a good number of spot vessels competing for short hauls,'' said broker firm ICAP.

''Activity levels in the North Pacific have been relatively high in the past few days with vessels trading at around $20,000 per day.''

The Baltic's panamax index fell 3.18 percent, or 83 points, from the previous session to settle at 2,524 points.

Top iron ore producer Vale of Brazil expects steel demand in China, the world's biggest market, to rebound early next year, potentially reviving demand for dry bulk carriers.