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Last updateΠεμ, 18 Ιουλ 2024 7pm

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The dry bulk cargo market returned from the Catholic Easter with a big drop

bulk ships 000

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios-Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market returned from the Easter holidays with a large drop mainly for the larger sizes, which showed losses of 20-35%, followed by the smaller sizes with single digit decreases compared to the week before Easter. More specifically, Capes decreased by 34.69%, Kamsarmaxes -21.7%, Supramaxes -8.84% and Handies -7.52%, compared to the previous week. Thus, the BDI fell by 568 credits (compared to March 22) and closed at 1628 credits on Friday, April 5.
Let’s see, in more detail, how the dry bulk cargo market by vessel’s size moved last week, starting with CAPEs. In Asia the market started the week without much action. However, as days passed the climate changed and the flow of cargo improved. So, at the end of the week the losses were limited. Index levels on the Australia-China route (C5) closed on Friday at $9.22/tn.
In the Atlantic Basin and especially in southern Brazil pressures were observed due to the large number of vessels moving to the region from Asia. In the north the picture was similar with demand unable to meet capacity supply and rates being driven down. Indexes on Friday for trips from Brazil to China reached up to $24.3/tn (for route C3), while rates from Continent to Asia closed at $45.75K/d (for route C9 ) and Transatlantic round trips at $15.71K/day (for route C8).
Regarding Kamsarmaxes, in the Atlantic and especially in the north the market continued to steadily lose ground due to the oversupply of vessels. The only support came from the north coast of South America for trips to Asia, but this was not enough. In the south there were no significant changes. The numbers were better for the loadings towards the end of April but for May the demand is limited. For example, the rates for the trips from the E. Coast of S. America (ECSA) to the Far East reached up to $19-21K/day (Asia delivery), Continent to Asia at $23.5-25.5K/day (Continent delivery) and transatlantic round trips at $11.5-13.5K/day (Gibraltar delivery).
On the other hand, in Asia the market appeared to be affected by negative future forecasts. However, there was a good volume of closures. Expect the market to slow down during the EID holidays. Indonesia-Far East round trip rates moved to $14-16K/day (Far East delivery).
For Supramaxes-Ultramaxes, in Southeast Asia the market moved downwards as shipowners’ alternatives were limited and competition between them was intense. SMXs rates for trips between S.E. Asia and the Far East went to 14.5-16K/day. Further north, in the Far East the market showed a satisfactory volume of closures absorbing much of the readily available southern vessels. SMXs rates for round trips to NOPAC moved to $12-13.5K/day, for trips to W. C. India at $10-11.5K/day, and round trips across the Atlantic Basin (BH) to $11.5- 13K/day.
In the Middle East Gulf and West C. India, the market came under pressure as there was not much movement. It seems that the market has got into a mood of Eid celebrations. SMX rates for Far East trips ranged between $16-17.5K/day (from Middle East’s Gulf (MEG) – West C. India (WCI)), for short-haul trips between Middle’s East Gulf – West C. India at $13-14.5 K/day and trips to the Atlantic Basin at $5.5-7 K/day.
In the Atlantic Basin and especially the American Gulf, it was calm and the number of vessel constantly increased. Only transatlantic trips showed some interest while trips to Asia showed a larger decline. SMXs rates for Transatlantic trips reached up to $11.5-13K/day and to Asia $17-18.5K/day. The ECSA area moved at low speeds as demand was limited and there were enough vessels available. However, during the week, more loads appeared, improving the climate but not the rates. The rates of SMXs for trips totripsS. E. Asia-China moved to $25.5-27K/day and for Transatlantic trips (Mediterranean/Continent) to $19.5-21K/day.
Continent showed improvements with more scrap and grain cargoes. SMX rates for round-local trips moved to $16-17.5K/day, for trips with SCRAP cargoes to the Mediterranean at $16.5-18K/day and to Asia at $26-27.5K/ day. The Mediterranean did not see much action during the week, which was short due to the Catholic Easter. No particular improvements are expected until the middle of the month. Indicatively, it is reported that an SMX for a trip from the Mediterranean to Asia closed at $27-28.5K/day (Canakkale delivery), to the other side of the Atlantic Basin at $11-12.5K/day and into the Mediterranean at $ 11.5-13 K/day (outside war zones).
In the Handies market, in Continent market was subdued, with reduced activity and few closures. However, according to the data so far, more action is expected in the next period. Fares for the largest vessels in the class, for round trips reached up to $13.5-15K/day, to the Mediterranean with Scrap cargoes at $13.5-15K/day and for Transatlantic trips at $12.5-14K /day.
The Mediterranean showed negative trends despite the fact that there were some new cargoes. There is still an oversupply of vessels which is expected to keep pressure on the region. Larger vessel rates (over 36K tonnes DWT) for intra-Med trips moved to $11.5-13K/day (delivery at Canakkale), to Continent at $10-11.5K/day (delivery at Canakkale), to the other side of the Atlantic Basin at $10.5-12K/day (delivery to Canakkale) and to Asia at $17-18.5K/day.
On the other side of the Atlantic, in the US Gulf the market continued the local course of the last few days in most routes. According to the April data, we expect improvements from the second half of the month. Indicatively, the rates of the largest vessels in the class for trips to the other side of the Atlantic ranged from $6.5-8K/day and to Asia at $14.5-16K/day.
The East Coast of South America (ECSA) region moved lower. The capacity supply was kept at the same levels, but a small drop in cargo volume led to a drop in rates. Thus, the charters of larger vessels from the ECSA area for Transatlantic trips (Continent – Mediterranean) moved to $18.5-20K/day and to Asia at $22-23.5K/day.
In Asia the market moved lower in the north and in the south. The large concentration of vessels in Australia and the movement of some from the East Indies added pressure to the south. In the north the picture was just as bad with many vessels available and little new cargo from the North Pacific and China. Further west in the Gulf, the Middle East and India moved at the same levels, however the upcoming EID holiday is expected to limit activity quite a bit. Far East and NOPAC round trip charters on larger vessels closed at $11-12.5K/day, from S. E. Asia to China at $11.5-13K/day and from the West C. India to China at $11-12.5K/day.

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

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