10JUL2019 - NEWS - Dry Freight Rates Buoyed by Scrubber Refit Work

With the world's largest dry cargo ships coming out of service for refits to comply with tougher rules on emissions, charter rates are expected to remain strong, a top Cargill executive said, after posting 7-fold gains already this year.

"There are a lot of ships - especially on the capesizes - that will go into scrubber fitting which basically means they will be out of service for at least 25 days each to do so," Jan Dieleman, president of trading firm Cargill's ocean transportation business, told Reuters.

"If you add it all up, in a very short period of time you take actually quite some supply out of the market."

Dieleman said some ships had already been taken out of service to be fitted with scrubbers and the pace will pick up in the third and fourth quarter of this year before the regulations come into effect on January 1, 2020.

Having hit lows under $3,500 a day earlier this year, earnings for capesize ships already stand at more than $26,000 a day, buoyed in part by demand for iron ore.