News in English

Finally a rise for the dry bulk market

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios –Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market finally showed an increase after 4 weeks (since January 10) of continuous decline, and in fact a double-digit increase. The leaders in this course were the Panamaxes that broke free and rose by almost 30%, compared to the previous week, while the smaller sizes followed. Also, the weekly losses of the Capes were marginal. In detail, the Capes fell by 3.92%, the Kamsarmaxes +29.4%, the Ultramaxes (63) +12.2% and the Handies +8.61%, compared to the previous week. Thus, the BDI fell by 209 credits , compared to the previous week and closed at 815 credits on Friday, February 7.
Let's see, in more detail, how the dry bulk cargo market moved last week by vessels size, starting with the CAPEs. Asia saw improvements at the start of the week, with more cargo and a reduction in the number of available vessels. This encouraged several shipowners to try their luck by staying in the region rather than moving to the Atlantic Basin. The index levels on the Australia-China route (C5) closed on Friday at $6.71/tn.
In the Atlantic Basin and particularly in the north, the market remained under pressure mainly on transatlantic trips, due to the oversupply of vessels. On the contrary, trips to Asia showed a little more interest. The picture was similar in southern Brazil and western Africa where rates moved at the same levels. Friday's indexes reached up to $17.16/tn for trips from Brazil to China (for route C3), while Continent to Asia rates closed at $25.19 K/day (for route C9) and Transatlantic round trips at $4.34K/day (for route C8).
Regarding Kamsarmaxes, in the Atlantic basin and particularly in the north the market had a slow start to the week, however activity quickly improved mainly for transatlantic trips in the north. Increases were also noted in the south with rates for trips to China improving during the week by 1K usd. Indicatively, rates for trips from the East Coast of the S. Americas (ECSA) to the Far East reached up to $8.5-10.5K/day (delivery Asia), from Continent to Asia at $14-16K/day (delivery in Continent ) and circular Transatlantic trips at $7-9K/day (delivery in Gibraltar).
On the other hand, in Asia, activity increased sharply with charterers and shipowners returning to their offices after the Chinese New Year celebrations. Thus, an increase in the flow of new cargoes and ships was observed. Additional support came from the North Pacific. Rates for round trips in Indonesia-Far East moved at $7-9K/day (delivery Far East).
For Supramaxes-Ultramaxes, the market in Southeast Asia showed an increase after China returned. However, the driver of this trend was coal cargoes. In addition, there was support from the Australian region. UMXs rates for trips between SE Asia and the Far East went to 8.5-10K/day. Further north, in the Far East, the market started the week hesitantly but from Wednesday onwards the pace picked up with more activity and an increase in rates in the North Pacific. UMXs rates for round trips in the North Pacific (NOPAC) moved to $ 7-8.5K/day, for trips to W. C. India at $ 8.5-10K/day and return trips in the Atlantic Basin (BH) at $ 7.5-9K/day.
In the Middle East Gulf and the West C. Indie the market showed improved activity with some new cargoes appearing and some vessels being closed mainly for trips to the Far East. Rates for UMXs to the Far East ranged between $7-8.5K/day (from Middle East Gulf (MEG) – West C. Indies (WCI)), for short trips between Middle East Gulf – West C. India from $7-8.5K/day and trips to the Atlantic Basin from $4-5.5K/day.
The Atlantic Basin and especially the American Gulf seemed to show signs of recovery as demand improved somewhat during the week while towards the end the supply of capacity began to be significantly limited. Rates for UMXs to the Transatlantic range reached up to $14-15.5K/day and to Asia from $15-16.5K/day. The ECSA region had a positive start to the week as Asia was active resulting in increased cargoes. Additionally, mid-week market demand was boosted by several transatlantic cargoes. UMXs rates for trips to SE Asia-China were at $17.5-19K/day and for Transatlantic trips (Mediterranean/Continent) at $14-15.5K/day.
Continent experienced another negative week with limited demand and many vessels had to book some rates on an APS basis. UMXs rates for round-local trips were at $7.5-9K/day, for SCRAP trips to the Mediterranean at $6-7.5K/day and to Asia at $9-10.5K/day. The Mediterranean seemed to be positively affected by the return of the Chinese to active activity. Something that shipowners tried to exploit but charterers were not ready to change their minds. Indicatively, it is reported that a UMX for a trip from the Mediterranean to Asia closed at $ 11.5-13K/day (delivery Canakkale), to the other side of the Atlantic Basin at $ 4.5-6K/day and within the Mediterranean at $ 6.5-8K/day (excluding war zones).
In the Handies market, in Continent the market proceeded with small increases mainly for trips to the Mediterranean but also for round trips. However, the general picture remained negative and for this reason many shipowners are considering moving to the other side of the Atlantic Basin. The rates for the largest vessels in the category, for round trips, reached up to $ 7-8.5K/day, to the Mediterranean with scrap cargoes at $ 7-8.5K/day and for Transatlantic trips at $ 4.5-6K/day.
The Mediterranean showed improvements in terms of rates on all routes as demand showed signs of recovery. The rates of the largest vessels (over 36K tons DWT) for trips within the Mediterranean moved at $ 4.5-6K/day (delivery in Canakkale), to Continent at $ 4-5.5K/day (delivery in Canakkale), to the other side of the Atlantic Basin at $ 4.5-6K/day (delivery in Canakkale) and to Asia at $ 8-9.5K/day.
On the other side of the Atlantic Basin, in the American Gulf, the market showed improvements as there was more activity, however, the oversupply that has accumulated in the past period did not leave room for significant increases. Indicatively, the rates of the largest vessels in the category for trips to the other side of the Atlantic Basin ranged at $ 8.5-10K/day and to Asia at $ 12-13.5K/day.
The East Coast of South America (ECSA) region had a slow start but soon new cargoes made their appearance, changing the overall climate and helping rates to rise. In addition, several of the largest vessels in the sector found some employment. We hope that this trend was not temporary and will continue in the coming days. Thus, the rates of the largest vessels from the ECSA region for Transatlantic trips (Continent-Mediterranean) moved at $ 10.5-12K/day and to Asia at $ 12-13.5K/day.
In Asia, the market returned dynamically both in the north and in the south with more mobility. However, the concentration of capacity in the previous days was so great that the rates did not show significant differences. However, the climate has changed to the more positive. The picture was also positive for the Middle East Gulf and W. C. India, however, the rates remained at low levels. The rates of the largest vessels in the category for round trips in the Far East and NOPAC closed at $ 6-7.5K /day, from SE Asia to China at $ 6.5-8K /day and from the West C. India to China at $6-7.5K/day..

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