Dry bulk market: Capesizes are under further pressure

Cmonkey size
The Capesize market had little joy this week as rates eased over the week, albeit on the basis of reasonable fixing activity. The Capesize 5TC now stands at $9,305 – down from 3,502 week-on-week. The Atlantic region, particularly in the north, showed some signs of resilience and positive sentiment earlier in the week. This did not last as price levels retreated into the weekend and the Transatlantic C8 is now trading at $13,022 while the Transpacific C10 is trading at $7,918. Western Australian miners have been active throughout the week, taking a large number of vessels in the spot market. However, the fact that the C5 continues to fall is a clear indication of the health of the market. While there are expectations and reports of stimulus from China to help revitalize its economy, few signs of life have leaked out in the cargo market. Without such a stimulus, the prospects for the cape market are looking increasingly gloomy in the near term.

Panamax

Week after week, the Panamax market saw only minor corrections. However, we end the week on a clear negative tone. Despite possible positive news for the market with the expansion of grain exports from Ukraine, the tonnage figure increased in the continental and Mediterranean regions. This brought softer levels as demand for transatlantic travel offers minimal returns. Activity ex EC South America was fluid for the first half of the third week as some arrival games were completed from December 10th to 20th, but this eased as the weekend drew near. A disappointing week in Asia with rates falling well over $1,000 for the longer rounds via NoPac and Australia while Fixing ex Indonesia posted even more spectacular falls. Prices are now heavily discounted from the smaller and more mature tonnage. $8,000 was agreed for a 76,000-dwt, with bids now well below that. There was time-limited activity, but reports surfaced of an 82,000 dwt shipment in China reaching under $16,000 for a one-year period.

Ultramax/Supramax

Brokers said it had been an unexciting week as the Atlantic remained more positional. The only reinforcements were seen from the US Gulf, but mainly for Far East voyages, while transatlantic voyages did not offer such rewards. There was positive sentiment from the Eastern Mediterranean at the end of the week due to the expansion of the grain corridor. Asia saw a steady stream of new inquiries from the South, but rates remained relatively flat as immediate tonnage availability remained strong. Further north, it’s been a mixed week with little demand. Period activity was limited but an open 60,000 dwt continent was set for 10-12 months and traded at $14,000. From the Atlantic was heard a 56,000 dwt fixed delivery on the US Gulf for a US$29,000 voyage to the west coast of India. Elsewhere, a 57,000-tdwt priced a voyage shipment to Spain and West Africa at $18,000. From Asia, a 63,500 dwt Singapore open has priced a voyage via Indonesia to Thailand at US$10,500. A similarly sized open South China has priced a trip via Indonesia with return delivery to China at US$8,000.

Handysize

A very subdued week, certainly in the Atlantic. Brokers said there was limited new demand in many areas and downward pressure generally remained across the board. Period activity was subdued, but a small handy 16,000 dwt Open Vietnam traded at $10,000 for three to five months. From the Atlantic a 34,000 dwt fixed delivery voyage to the lower Baltic with grain to Morocco in the low $14,000 range. A 32,000 dwt open Italy has been heard out of the Mediterranean, priced at around $16,000 for a voyage to the Baltic Sea. From across the pond, a 34,000 dwt Recalada voyage with fixed delivery and grain return to the west coast of South America for US$29,000. Asia was similarly unexciting, although mixed opinions emerged, with some seeing a tightening of tonnage from the north. A 32,000 dwt open Penang was priced at US$10,000 for Singapore-Japan return delivery with two legs loaded. While another open 32,000 dwt South Korea was priced at around US$10,000 bound for the west coast of South America.
Source: Baltic Exchange

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