Asia Dry Bulk-Capesize rates to remain flat despite capacity cuts

* Up to 50 capesizes idle, laid-up around the Pacific -broker

* 28 capesizes sold for recycling -ship buyer

* Rates remain near two-month lows

By Keith Wallis

SINGAPORE, March 26 (Reuters) - Rates for capesize bulk carriers, which have been close to six-year lows for the last two months, are unlikely to improve as a tonnage glut continues to weigh on the market even as owners increasingly idle, lay-up or scrap their vessels, brokers said.

"I don't think there's any positive news. There is no sign the market is going to improve," a Shanghai-based capesize broker told Reuters on Thursday.

The broker estimated there are around 50 ships in the Pacific basin waiting for charters, with a further 40-50 ships idled or laid-up around South Africa and the Pacific region.

Owners had also sold 28 capesize vessels for scrapping so far this year compared with 35 for the whole of 2014, said a Singapore-based buyer of scrap ships.

Despite these cuts in capacity rates have remained relatively flat, Reuters shipping data showed.

There are 1,639 capesize ships, used to haul iron ore and coal, in the global merchant fleet, according to figures from British shipping services firm Clarkson (LSE: CKN.L - news) .

"Coal trading is moderate but not in complete limbo, iron ore flows are below industry capacity but in line with predictions - the problem is and remains a grotesque oversupply of tonnage," said Norwegian ship broker Fearnley in a weekly note on Wednesday.

Charter rates for the Western Australia-China route hovered around $4.52 per tonne on Wednesday, up just 10 cents on the week. Rates are still close to $4.12 per tonne reached on Jan. 12, the lowest since December 2008.

Rates for the Brazil-China route edged up to $10.23 per tonne on Wednesday, compared with $10.10 per tonne last Wednesday. Rates dropped to $9.65 per tonne on Jan. 9, the lowest since January 2009.

Freight rates in the smaller panamax market are likely to fall further next week as chartering activity slows and available tonnage increases, brokers said.

"A number of cargoes have been fixed with slightly forward dates showing charterers are waiting for rates to fall further," said a Singapore-based panamax broker on Thursday.

Rates for a panamax transpacific voyage fell to $5,077 per day on Wednesday, compared with $5,400 last Wednesday.

Freight rates for smaller supramax bulk carriers were buoyed by increased coal volumes to India, Fearnley said. Roundtrip North Pacific voyages were being fixed at around $6,000-$7,000 per day, Fearnley said.

The Baltic Exchange's main sea freight index closed up at 598 on Wednesday, against 571 last week. (Reporting By Keith Wallis; Editing by Anand Basu)