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Last updateΠεμ, 18 Ιουλ 2024 7pm

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Losses of all sizes in the Dry Bulk Cargo Market

bulk ships 000

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios-Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market showed downward trends last week compared to the previous one, with the largest sizes showing the biggest losses followed by the smaller ones. More specifically, Capes fell by 18.74%, Kamsarmaxes -9.9%, Supramaxes -5.39% and Handies -1.85%, compared to the previous week. Thus, the BDI fell by 285 credits compared to the previous week and closed at 1844 credits on Friday, May 17.
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 number of vessels available was limited, however shipowners could not take advantage of this market situation as the absence of coal cargoes was evident and only some iron ore cargoes helped the market but not enough to arrest the decline. Index levels on the Australia-China route (C5) closed on Friday at $10.66/tn.
In the Atlantic Basin, both north and south recorded losses, with the greatest losses occurring in the north. Also, Brazil and West Africa moved at low speeds resulting in an increase in the number of moving vessels putting pressure on rates. Indexes on Friday for trips from Brazil to China reached $25.1/tn (for route C3), while rates from Continent to Asia closed at $43.29K/d (for route C9 ) and Transatlantic round trips at $21.26K/day (for route C8).
Regarding Kamsarmaxes, in the Atlantic basin the North moved lower as there was a build-up of capacity at the start of the week which also set the pace for the market. In the south there is more activity with several closures in late May and early June, but at lower levels than last week. For example, the rates for the trips from the E. Coast S. Americas (ECSA) to the Far East reached up to $19-21K/day (Asia delivery), Continent to Asia at $25-27K/day (Continent delivery) and transatlantic round trips at $12.5 -14.5 K/day (delivery to Gibraltar).
On the other hand, in Asia the market followed the negative course of future forecasts and the East coast of S. America (ECSA). However, limited capacity in the south and increased demand from Australia helped the market limit losses. Indonesia-Far East round trip rates moved to $16-18K/day (Far East delivery).
For the Supramaxes-Ultramaxes, there was a lull in Southeast Asia. The number of vessels increased, putting pressure norrates. SMXs rates for travel between S. E. Asia and the Far East went to 19.5-21K/day. Further north in the Far East the market declined and only trips from Russia or to the Mediterranean offered some bonus (due to the passage through the Gulf of Aden). SMXs rates for North Pacific (NOPAC) round trips moved to $13-14.5K/day, W. C. India round trips to $13.5-15K/day and Atlantic (BH) round trips to $ 13.5-15K/day.
In the Middle East Gulf and West C. India the market progressed without particular changes. Vessel supply increased slightly while demand stagnated. SMX rates for Far East trips ranged from $17-18.5K/day (from Middle East’s Gulf AMEG) – West C. India (WCI)), for short-haul trips between Middle East Gulf – West C India at $14.5-16 K/day and trips to the Atlantic Basin at $ 7-8.5 K/day.
In the Atlantic Basin and especially the US Gulf, demand fell short of the growing supply of capacity. It is worth noting that several shipowners preferred to move further south to find higher paying cargoes. SMX rates for Transatlantic trips reached up to $14.5-16K/day and to Asia $19-20.5K/day. The ECSA region moved lower as demand was tight and there was a concentration of capacity on both the East Coast and West Africa. It should be noted that the north was more pressed due to the moving vessels from the bay. The rates of SMXs for trips to the S. E. Asia-China moved to $23.5-25K/day and for Transatlantic travel (Mediterranean/Continent) to $19.5-21K/day.
Continent did not show anything remarkable during the first days of last week. The number of vessels gradually increased and the only support in the market came from scrap cargoes to the Mediterranean and the American Gulf. SMXs rates for round-local trips moved to $12.5-14K/day, for trips with SCRAP cargoes to the Mediterranean at $13.5-15K/day and to Asia at $22.5-24K/ day. The Mediterranean showed strong downward trends as the cargoes that would help reverse the climate were absent and the only interest, from the demand side, existed during the last days of the month. For example, it is reported that an SMX for a trip from the Mediterranean to Asia closed at $26-27.5K/day (Canakkale delivery), to the other side of the Atlantic Basin at $9-10.5K/day and into the Mediterranean at $ 10.5-12 K/day (outside war zones).
In the Handies market, in Continent the market was quiet and it was only towards the end of the week that we saw some loads from the Baltic, leaving a cautious optimism that next week will be better. Rates for the largest vessels in the class, for round trips reached up to $12-13.5K/day, to the Mediterranean with scrap cargoes at $11-12.5K/day and for transatlantic trips at $9-10.5K /day.
The Mediterranean showed some movement as there were some cargoes stirring the waters, but all talks were held at lower levels than last week. Larger vessel rates (above 36K tonnes DWT) for intra-Med trips moved to $7.5-9K/day (delivery at Canakkale), to Continent at $7-8.5K/day (delivery at Canakkale), to the other side of the Atlantic Basin at $8-9.5K/day (delivery to Canakkale) and to Asia at $14-15.5K/day.
On the other side of the Atlantic Basin, in the US Gulf the market continued to be under pressure as cargo volumes were limited while the vessel list remained long. Indicatively, the rates of the largest vessels in the class for trips to the other side of the Atlantic ranged between $10.5-12K/day and to Asia at $14-15.5K/day.
The East Coast of South America (ECSA) region saw a drop in rates as there was an abundance of vessels available in the north. Conversely in the south we saw smaller losses as there were a few more trips to Asia. Thus, the charters of larger vessels from the ECSA area for Transatlantic trips (Continent – Mediterranean) moved to $15-16.5K/day and to Asia at $20.5-22K/day.
In Asia the market moved at two speeds. On the one hand in the south with more cargoes mainly from Australia while the number of vessels was limited, and on the other hand in the north where the competition of shipowners was greater to find some employment for their vessels. Further west in the middle eastern bay the market without particular changes. Far East and NOPAC round trip charters for larger vessels closed at $12.5-14K/day, from S. E. Asia to China at $15-16.5K/day and from the West C. India to China at $10.5-12K/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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