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February ended with an impressive rise in Capes

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios-Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market advanced with a large increase in the BDI thanks to the almost doubling of the general Capes index (BCI-180).

The remaining sizes showed marginal weekly increases with the exception of Panamaxes which recorded losses. Specifically, Capes rose by 83.46%, Kamsarmaxes -9.13%, Ultramaxes (63) +0.98% and Handies +2.4%, compared to the previous week. Thus, the BDI rose by 248 credits , compared to the previous week and closed at 1229 credits on Friday, February 28.
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 showed great momentum mainly due to the small number of available vessels and the steady demand from miners and Operators and more coal cargoes. The index levels on the Australia-China route (C5) closed on Friday at $9.86/tn.
In the Atlantic Basin, Southern Brazil and West C. Africa provided support to the market with more cargoes to China while the number of vessels moving in this basin was also limited. Thus, during the week, the relevant index gained $1.5/t. In the north, the mood remained positive with the C8 and C9 Indexes continuously gaining ground. Friday's indexes reached up to $19.98/tn for trips from Brazil to China (for route C3), while Continent to Asia rates closed at $32.81 K/day (for route C9) and Transatlantic round trips at $9.31K/day (for route C8).
Regarding Kamsarmaxes, the Atlantic basin and particularly the north were calm while the combination of large available supply and limited demand on all routes led to a drop in rates. In the south we had a slow start to the week with few negotiations. However, the physical market then adjusted to the course of the P6 index. Indicatively, rates for trips from the East Coast of the S. America (ECSA) to the Far East reached up to $ 14-14.5K/day + 400-450K BB (delivery Latin America), from Continent to Asia at $ 13.5-15.5K/day (delivery in Continent) and the circular Transatlantic trips at $ 5.5-7.5K/day (delivery in Gibraltar).
On the other hand, in Asia the market faced downward trends due to the high concentration of capacity. Only towards the end of the week was a significant drop in vessel supply observed mainly in the northern regions. The main sources of cargo were Eastern Australia and Northern China. The rates for round trips in Indonesia-Far East moved at $ 10.5-12.5K /day (delivery Far East).
For Supramaxes-Ultramaxes, the market in Southeast Asia started the week positively but by midweek the lack of demand put pressure on rates. Fortunately a small increase in cargoes from Australia contained the decline. UMXs rates for trips between Southeast Asia and the Far East went to 13-14.5K/day. Further north, in the Far East the market progressed positively with steady growth in the North Pacific trades and quite a few more cargoes in the market to the Atlantic Basin. UMXs rates for round trips in the North Pacific (NOPAC) moved to $10-11.5K/day, for trips to W. C. India at $12.5-14K/day and return trips to the Atlantic Basin (BH) at $12-13.5K/day.
In the Middle East Gulf and West C. India, the market recorded small corrections after remaining calm for the most part. Given that the Ramadan period is starting, we expect it to continue at a low pace in the coming period. UMXs rates for Far East trips ranged between $9-10.5K/day (from Middle East Gulf(MEG) – West C. India (WCI)), for short trips between Middle East’s Gulf – West C. India at $7.5-9K/day and trips to the Atlantic Basinat $5-6.5K/day.
In the Atlantic Basin and especially the American Gulf, there were small improvements in capacity as much of it was absorbed in the middle of the week. It should be noted that there were large fluctuations in rates mainly for trips to Asia. UMXs rates for Transatlantic trips reached up to $13-14.5K/day and to Asia at $15-16.5K/day. The ECSA region moved slowly as most of the requirements had been covered in the previous period. UMXs rates for trips to SE Asia-China moved at $17-18.5K/day and for Transatlantic trips (Mediterranean/Continent) at $15.5-17K/day.
Continent was calm and a relative balance between supply and demand prevailed, both vessels and cargoes were limited. UMXs rates for round-local trips were at $ 9-10.5K/day, for trips with SCRAP cargoes to the Mediterranean at $ 11-12.5K /day and to Asia at $ 14-15.5K /day. The Mediterranean showed limited activity with few new cargoes, since the cargoes that were closed in the previous period were not renewed. A positive point is that the supplied capacity remained limited. Indicatively, it is reported that a UMX for a trip from the Mediterranean to Asia closed at $ 12-13.5K/day (delivery Canakkale), to the other side of the Atlantic Basin at $ 5.5-7K/day and within the Mediterranean at $ 8.5-10K/day (excluding war zones).
In the Handies market, in Continent the market showed an increase due to the lack of capacity but also the increased demand mainly for cargoes at the end of February. The rates for the largest vessels in the category, for round trips, reached up to $ 13-14.5K/day, to the Mediterranean with scrap cargoes at $ 13-14.5K/day and for Transatlantic trips at $ 7.5-9K/day.
The Mediterranean, just as it closed the previous week on some positive notes with some closings at slightly higher levels. Again, the Western Mediterranean was the star, while in the Eastern Mediterranean the competition between shipowners was more intense. The freight rates of the largest vessels (over 36K tons DWT) for trips within the Mediterranean moved at $ 5-6.5K/day (delivery in Canakkale), to Continent at $ 5-6.5K/day (delivery in Canakkale), to the other side of the Atlantic Basin at $ 5.5-7K/day (delivery in Canakkale) and to Asia at $ 9-10.5K/day.
On the other side of the Atlantic Basin, in the American Gulf, the market was strengthened by a steady flow of cargoes, however, not many closings surfaced. At the same time, the list of available vessels remained long. Indicatively, the rates of the largest vessels in the category for trips to the other side of the Atlantic Basin ranged between $ 10-11.5K/day and to Asia at $ 12-13.5K/day.
The East Coast of South America (ECSA) region showed downward corrections. Demand remains strong, however, the concentration of capacity is what pressured the rates towards the end of the week. Thus, the rates of the largest vessels from the ECSA region for Transatlantic trips (Continent-Mediterranean) moved at $ 14.5-16K/day and to Asia at $ 14.5-16K/day.
In Asia and mainly in the south the market was under pressure as both Indonesia and Australia remained calm. In the north more stability was observed as South Korea and Japan were quite active. Further west in the Gulf of the Middle East and W. C. India the market proceeded without any particular differences. The rates of the largest vessels in the category for round trips in the Far East and NOPAC closed at $ 8.5-10K / day, from S.E. Asia to China at $ 8.5-10K / day and from 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