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Last updateΠαρ, 12 Ιουλ 2024 9pm

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Marginal rise for 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 stabilizing trends, closing the week with a marginal increase of 1%, compared to the previous one, thanks to Capes and Handies, while the rest of the figures showed a single-digit decline. More specifically, Capes rose by 7.9%, Kamsarmaxes -7.17%, Supramaxes -3.63% and Handies +4.7%, compared to the previous week. Thus, the BDI fell marginally by only 18 credits, compared to the previous week, and closed at 1815 credits on Friday, May 31.
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 week started with oversupply determining rates. However, the sequels were particularly active with the three largest charterers taking out cargoes during the week from Indonesia and Eastern Australia. Index levels on the Australia-China route (C5) closed on Friday at $11.14/tn.
In the Atlantic Basin the picture was different. The week started with the bank holiday in England and continued at low rates throughout the week. In addition, moving vessels from Asia added pressure. Indexes on Friday for trips from Brazil to China reached up to $24.26/tn (for route C3), while rates from Continent to Asia closed at $48.56K/d (for route C9 ) and Transatlantic round trips at $22.25K/day (for route C8).
Regarding the Kamsarmaxes, in its basin and mainly in Continent, trips to Asia stood out, where mineral cargoes boosted demand. Conversely, transatlantic trips were fewer. And in the south, there were losses as activity from Brazil was declining. For example, the rates for the trips from the E. Coast S. America (ECSA) to the Far East reached up to $17-19K/day (Asia delivery), Continent to Asia at $23.5-25.5K/day (Continent delivery) and transatlantic round trips at $10-12K/day (Gibraltar delivery).
On the other hand, in Asia the market was quiet for most of the week and only towards the end did we see some signs of life. Both the North Pacific and Australia and Indonesia had few new cargoes resulting in lower rates. Indonesia-Far East round trip rates moved to $17.5-19.5K/day (Far East delivery).
For Supramaxes-Ultramaxes, coal cargoes from Indonesia were absent in Southeast Asia while Australia was also quiet. Thus, there was a concentration of capacity driving rates to lower levels. It should be noted that we saw more loads for mid-June expecting improvements. SMXs rates for travel between S. E. Asia and the Far East went to 16.5-18K/day. Further north, in the Far East the market moved at low speeds as there was not much new demand while some vessels moved south. SMXs rates for North Pacific (NOPAC) round trips moved to $12.5-14K/day, India round trips to $13-14.5K/day and Atlantic (BH) round trips to $ 12.5-14K/day.
In the Middle East Gulf and West C. India, the market lost ground as activity was sluggish. However, interest is piqued by southern Africa where there was mobility absorbing part of the open ships. SMX rates for Far East trips ranged between $15-16.5K/day (from Middle East’s Gulf (MEG) – West C. India (WCI)), for short-haul trips between Middle East Gulf – West C. India at $12-13.5 K/day and trips to the Atlantic at $ 7-8.5 K/day.
In the Atlantic Basin and especially the US Gulf retreated as limited activity was observed in all routes. Fewer vessels may be expected for the next few days however and the cargo list is smaller than in previous days. Basin rates for Transatlantic trips reached up to $12.5-14K/day and to Asia $18-19.5K/day. The ECSA area showed improvements as we saw increased demand while the number of vessels in the area also decreased. Thus, there were increased rates to all regions. The rates of SMXs for trips to the S.E. Asia-China moved to $22.5-24K/day and for Transatlantic trips (Mediterranean/Continent) to $16.5-18K/day.
Continent had another quiet week with demand on the wane. We expect next week to be calm as well since attention is focused on Posidonia. SMX rates for round-local trips moved to $9.5-11K/day, for trips with SCRAP cargoes to the Mediterranean at $10.5-12K/day and to Asia at $17.5-19K/ day. The Mediterranean receded further. Despite the improvement in demand, the oversupply of vessels could not be met by halting all recovery efforts. So, rates fell further. For example, it is reported that an SMX for a trip from the Mediterranean to Asia closed at $18.5-20K/day (Canakkale delivery), to the other side of the Atlantic Basin at $7.5-9K/day and within the Mediterranean at $ 8.5-10 K/day (outside war zones).
In the Handies market, in Continent the market was pressured by the apparent lack of cargo but also by the increase in vessels that will be available in the next period. Competition was fierce for the smaller vessels in the sector. Rates for the largest vessels in the class, for round trips reached up to $7.5-9K/day, to the Mediterranean with scrap cargoes at $9-10.5K/day and for transatlantic trips at $6-7.5K /day.
The Mediterranean continued its modest course influenced by the broader negative trend of the Atlantic. A positive point is the fact that several vessels from the western Mediterranean have decided to move to Latin America, unloading the supply. Larger vessel rates (over 36K tonnes DWT) for intra-Med trips moved to $6-7.5K/day (delivery at Canakkale), to Continent at $6-7.5K/day (delivery to Canakkale), to the other side of the Atlantic Basin at $6.5-8K/day (delivery to Canakkale) and to Asia at $12-13.5K/day.
On the other side of the Atlantic Basin, in the American Gulf the market showed marginal losses, which are mainly due to relaxation due to the few days of holidays. The number of vessels available in the area remains high for the next few days, however we are seeing more cargoes so we expect the market to normalize. Indicatively, the rates of the largest vessels in the class for trips to the other side of the Atlantic Basin ranged between 0-11.5K/day and to Asia at $13-14.5K/day.
The East Coast of South America (ECSA) region was characterized by a different picture between north and south and increased rates for coastal travel. However, there are signs of market fatigue. Thus, the charters of larger vessels from the ECSA area for Transatlantic trips (Continent – Mediterranean) moved to $17.5-19K/day and to Asia at $18.5-20K/day.
In Asia there was a shortage of available vessels both in the market and in the south. In addition, vessels that could call Australia could earn a premium while the North Pacific was also active. Further west in the Middle East Gulf and W. C. India the market appeared balanced between demand and supply. Far East and NOPAC round trip charters on larger vessels closed at $15-16.5K/day, from S.E. Asia to China at $17.5-19K/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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