News in English

The rise of Capes brought an increase in the BDI

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios –Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market moved ahead with a new rise in the BDI thanks to Capes, whose weekly increase exceeded 30%. On the contrary, Panamaxes and Ultramaxes recorded single-digit losses and Handies remained in the green. In detail, Capes rose by 33.23%, Kamsarmaxes -6.43%, Ultramaxes (63) -3.43% and Handies +1.64%, compared to the previous week. Thus, the BDI rose by 171 credits , compared to the previous week and closed at 1400 credits on Friday, March 7.
Let's see, in more detail, how the dry bulk cargo market moved last week by vessel’s size, starting with the CAPEs. In Asia, the week started with an increase in numbers on the main route c5. However, by mid-week, rates had fallen to single digits despite all three major miners being active. The week ended on a positive note with a small increase. The index levels on the Australia-China route (C5) closed on Friday at $10.1/tn.
In the Atlantic Basin, and particularly in the south, there was a gain in demand for April cargoes from both southern Brazil and West C. Africa to China. There was also a lot of activity in the north, with a reduction in vessel supply and a large increase in rates, mainly for transatlantic trips. Friday's indexes reached up to $22.72/tn for trips from Brazil to China (for route C3), while rates from Continent to Asia closed at $37.28K/day (for route C9) and Transatlantic round trips at $16.93K/day (for route C8).
Regarding Kamsarmaxes, in the Atlantic basin we saw marginally better cargo flow on the majority of routes, both north and south, but this was not accompanied by an increase in rates. Indicatively, rates for trips from the East Coast of the S. America (ECSA) to the Far East reached up to $ 12.5-13.5K/day + 250-350K BB (delivery Latin America), from Continent to Asia at $ 12.5-14.5K/day (delivery in Continent) and round Transatlantic trips at $ 5-7K/day (delivery in Gibraltar).
On the other hand, in Asia the market continued with downward trends as demand from Indonesia, Australia and the North Pacific was limited. The biggest decline is noted in circular trips from China via Indonesia. The rates for round trips in Indonesia-Far East moved to $ 7-9K /day (delivery in Far East).
For Supramaxes-Ultramaxes, in Southeast Asia the market started the week sluggishly with rates falling and demand being limited mainly for coal cargoes from Indonesia. UMXs rates for trips between SE Asia and the Far East went to 10.5-12K/day. Further north, in the Far East the market showed small corrections as Atlantic trips were absent and the only support came from the North Pacific, which contained further losses. UMXs rates for round trips in the North Pacific (NOPAC) moved to $9.5-11K/day, for trips to W. C. India at $11.5-13K/day and return trips to the Atlantic Basin (BH) at $12.5-14K/day.
In the Middle East Gulf and West C. India, the market proceeded without any significant changes in rates. We expect activity to remain subdued, but signs of recovery coming from South Africa are expected to draw some of the region’s available capacity. Far East UMX rates ranged between $9-10.5K/day (from Middle East’s Gulf (MEG) – West C. India (WCI)), for short Middle East’s Gulf – West C. India trades from $7.5-9K/day and Atlantic Basin trades from $5-6.5K/day.
The Atlantic Basin and especially the US Gulf were characterized by uncertainty due to the tension between America and China. However, there was a satisfactory volume of cargo to the West Coast and within the Gulf. UMXs rates for Transatlantic trips reached up to $13-14.5K/day and to Asia at $14.5-16K/day. The ECSA region showed two faces. On the one hand, cargoes with close loading dates were discussed at the same levels as last week, while cargoes for the second half of March were discussed at lower figures due to the increase in available capacity. UMXs rates for trips to SE Asia-China moved to $18-19.5K/day and for Transatlantic trips (Mediterranean/Continent) at $16.5-18K/day.
Continent had a slow start to the week as there was a large gap in the numbers between shipowners and charterers. Only a few scrap cargoes to the Eastern Mediterranean offered any premium. UMXs rates for round-local trips were at $12-13.5K/day, for SCRAP trips to the Mediterranean at $12-13.5K/day and to Asia at $15-16.5K/day. The Mediterranean started where it left off last week, however as the days passed over, oversupply led rates to lower levels. 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 $ 6.5-8K/day and within the Mediterranean at $ 8.5-10K/day (excluding war zones).
In the Handies market, in Continent the market remained at the same levels with minor variations despite the increased cargo volume and improved activity. There was a feeling that an increase in supply was expected in the coming period, so several shipowners preferred not to take risks. The rates for the largest vessels in the category, for round trips, reached up to $ 12.5-14K/day, to the Mediterranean with scrap cargoes at $ 12.5-14K/day and for Transatlantic trips at $ 8.5-10K/day.
The Mediterranean showed small improvements as both mineral and grain cargoes paid a premium on the main routes. The rates of the largest vessels (over 36K tons DWT) for trips within the Mediterranean moved to $ 6-7.5K/day (delivery in Canakkale), to Continent at $ 6-7.5K/day (delivery in Canakkale), to the other side of the Atlantic Basin at $ 6-7.5K/day (delivery in Canakkale) and to Asia at $ 10-11.5K/day.
On the other side of the Atlantic Basin, in the American Gulf, the market presented a satisfactory volume of closures which was accompanied by a positive climate. However, the long list of vessels located in the region is a concern. Indicatively, rates of the largest vessels in the category for trips to the other side of the Atlantic Basin ranged between $ 10.5-12K/day and to Asia from $ 12.5-14K/day.
The East Coast of South America (ECSA) region was calm with rates remaining at the same levels. It should be noted that an increase in the supply of vessels was observed in West Africa which is expected to create concerns on the other side of the Atlantic Basin in the near future. Thus, rates of the largest vessels from the ECSA region for Transatlantic trips (Continent -Mediterranean) moved at $ 13.5-15K/day and to Asia at $ 12.5-14K/day.
In Asia and mainly in the south, the market started at a low pace due to the lack of cargo for the first ten days of March. However, in the middle of the week, activity from Australia strengthened, dragging the rest of the region upwards. Further north, the lack of immediately available vessels helped the market, leading to higher numbers. Further west, in the Middle East Gulf and W. C. India, there was no particular activity and any support came from southern Africa, which was more active. Rates of the largest vessels in the category for round trips to the Far East and NOPAC were at $ 8-9.5K / day, from SE 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