News in English

The dry bulk cargo market entered the year of the Wood Snake

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios –Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market continued to decline with losses in both Capes and smaller sizes. A notable exception was the Kamsarmaxes, which after a period of recession showed a marginal increase. Specifically, Capes fell by 11.09%, Kamsarmaxes +3.33%, Ultramaxes (63) -5.6% and Handies -8.35%, compared to the previous week. Thus, the BDI fell by 209 credits , compared to the previous week and closed at 735 credits on Friday, January 31.
Let's see, in more detail, how the dry bulk cargo market moved last week by vessels size, starting with the CAPEs. In Asia, the market remained under pressure, affected by the inertia brought by the Chinese New Year holidays. Thus, the volume of cargo and closures was limited despite the fact that several miners were present. The index levels on the Australia-China route (C5) closed on Friday at $6.22/tn.
In the Atlantic Basin and particularly in the south, rates showed greater resilience to pressure as there was a steady flow of cargo. On the contrary, in the north, the long list of vessels and the short list of cargoes led to a decline in the main routes C8 and C9. The indexes on Friday reached up to $17.14/tn for the trips from Brazil to China (for the C3 route), while rates from Continent to Asia closed at $25.38 K/day (for the C9 route) and the Transatlantic round trips at $7.43K/day (for the C8 route).
Regarding Kamsarmaxes, in the Atlantic basin and especially in the north the week started sluggishly but after Wednesday the revs picked up and a balance between supply and demand prevailed. In the south there was more action with rates gaining up to 1.5K per day from the beginning to the end of the week on the main route to China. Indicatively, rates for trips from the East Coast of South America (ECSA) to the Far East reached up to $ 7.5-9.5K/day (delivery Asia), from Continent to Asia at $ 11.5-13.5K/day (delivery in Continent) and round Transatlantic trips at $ 5.5-7.5K/day (delivery in Gibraltar). On the other hand, in Asia as was natural there was no particular action due to the holidays. However, the positive picture of Latin America and future forecasts leave a note of optimism for a return soon. The rates for round trips in Indonesia-Far East moved at $ 5-7K /day (delivery Far East).
For Supramaxes-Ultramaxes, in Southeast Asia the market remained at the same levels despite the increased number of vessels due to the continuous flow of coal cargoes from Indonesia. The rates of UMXs for trips between SE Asia and the Far East went to 4.5-6K /day. Further north, in the Far East the market was in festive mode with holidays in China and Korea. We expect the action to return after the holidays, but many vessels need to be absorbed until the market stabilizes. UMXs for round trips in the North Pacific (NOPAC) were in the $6-7.5K/day range, for trips to W. C. India in the $7-8.5K/day range and for return trips to the Atlantic Basin(BH) in the $6-7.5K/day range.
In the Middle East Gulf and West C. India the market had a quiet week with only minor rate adjustments. We expect more activity after the Chinese New Year holidays. UMXs for trips to the Far East were in the $7-8.5K/day range (from Middle East Gulf (MEG) – West C. Indies (WCI)), for short trips between Middle East Gulf – West C. Indies in the $6-7.5K/day range and for trips to the Atlantic Basin in the $4-5.5K/day range.
In the Atlantic Basin and especially the American Gulf, cargo flow improved, resulting in several vessels in the region being covered. It is worth noting that larger vessels targeted longer trips, leaving transatlantic trips for smaller vessels. UMXs rates for transatlantic trips reached up to $13-14.5K/day and to Asia at $13.5-15K/day. The ECSA region proceeded calmly last week due to the Chinese New Year. At the beginning of the week, cargoes were few, but in the second half they increased and the fall in rates was limited. UMXs rates for trips to SE Asia-China moved at $13.5-15K/day and for transatlantic trips (Mediterranean/Continent) at $11.5-13K/day.
Continent showed limited activity resulting in a concentration of readily available capacity. Thus, several shipowners decided to move to the other side of the Atlantic or even to Gibraltar for some work from the western side of the Mediterranean. UMXs rates for round-local trips moved at $ 9-10.5K / day, for SCRAP trips to the Mediterranean at $ 7.5-9K / day and to Asia at $ 10-11.5K / day. The Mediterranean started the week dynamically but due to the Chinese New Year, activity fell and rates stabilized. Indicatively, it is reported that a UMX for a trip from the Mediterranean to Asia closed at $ 11-12.5K/day (delivery Canakkale), to the other side of the Atlantic Basin at $ 4.5-6K/day and within the Mediterranean at $ 7-8.5K/day (excluding war zones).
In the Handies market, in Continent the market showed an increased flow of cargo while the supply of capacity remained limited. This positive development mainly affected the largest vessels in the sector while the smaller ones remained under pressure. The rates for the largest vessels in the category, for round trips, reached up to $ 7-8.5K/day, to the Mediterranean with scrap cargo at $ 7-8.5K/day and for Transatlantic trips at $ 6-7.5K/day.
The Mediterranean is still trying to recover despite the fact that the number of vessels has decreased compared to the previous period. However, activity was at low levels. The rates of larger vessels (over 36K tons DWT) for trips within the Mediterranean were at $ 3.5-5K/day (delivery in Canakkale), to Continent at $ 3.5-5K/day (delivery in Canakkale), to the other side of the Atlantic Basin at $ 4-5.5K/day (delivery in Canakkale) and to Asia at $ 7-8.5K/day.
On the other side of the Atlantic Basin, in the American Gulf, the market showed improved closing volume. However, in terms of rates we did not see significant differences compared to the previous week. For the next period, the number of vessels remains high, but there is optimism that after the Chinese New Year, activity will improve. Indicatively, the rates of the largest vessels in the category for trips to the other side of the Atlantic Basinranged between $ 9.5-11K/day and to Asia at $ 12-13.5K/day.
The East Coast of South America (ECSA) region declined further with the greatest pressure being seen on the northern side as there were more vessels moving from the north and east. There was more demand, however the oversupply of vessels did not allow for any improvements. Thus, the rates of the largest vessels from the ECSA region for Transatlantic trips (Continent-Mediterranean) moved at $ 9.5-11K / day and to Asia at $ 11.5-13K / day.
In Asia, the market seemed to be absorbed by the Chinese New Year celebrations since there was calm both in the north and in the south. However, a large concentration of capacity supply in the previous period indicates that the recovery will be delayed a little longer. Further west in the Middle East Gulf and W. C. India, the market followed the broader downward climate of Asia, which we hope will change from next week. The rates of the largest vessels in the category for round trips to the Far East and NOPAC closed at $ 4-5.5K / day, from S.E. Asia to China at $5.5-7K/day and from West C. India to China at $5.5-7K/day.

Disclaimer
This report and the information contained herein it is for general information only and does not constitute an investment advice