Navigating the Handysize and Ultramax Markets: 

 

A Detailed Outlook

As we sail through another week in the ever-shifting seas of the dry bulk market, there are currents of uncertainty, but also opportunities that remain ripe for the taking. Let's hoist the sails and take a closer look at the market trends for the Handysize and Ultramax sectors across key global regions, where supply and demand balance, geopolitical waves, and vessel availability are the tides influencing the course ahead.

 

Riding the Waves of Uncertainty and Opportunity.

• US Gulf / US East Coast (USG/USEC). A Stubborn Tide of Uncertainty

The market in the US Gulf has been stuck in turbulent waters, buffeted by the uncertain winds of USTR* discussions. This has notably favored Japanese vessels, which had a competitive edge over their Chinese counterparts. Operators, preferring to rely on their own fleets, have kept rates steady. With no clear direction in sight, expect the market to drift sideways in the coming week. All eyes are on the ongoing USTR discussions, which could chart a new course for the region’s shipping activity.

The Office of the United States Trade Representative (USTR) was created in 1962 to advise the President on trade issues, lead international trade negotiations, and oversee the resolution of disputes, enforcement actions and other matters before global trade policy organizations such as the World Trade Organization.

• East Coast South America (ECSA): A Steady Breeze Despite Calm Seas

In the South American waters, the market was active, with an increase in cargo flow. However, this did not translate into higher rates, as they remained flat. The silver lining here is the market’s equilibrium, with supply and demand keeping things balanced. The southern part of the region showed a stronger performance compared to the north. Looking ahead, the cargo list for early April suggests a firm market, with favorable winds on the horizon.

• Continent: Navigating Calm Waters with Cautious Optimism

The Continent market was relatively calm, with prompt tonnage volumes lower and fresh requirements adding some upward pressure. With fewer vessels available, there is cautious optimism for a firm near-term outlook. However, all attention remains on developments with USTR, as the direction of those talks could shift the tides dramatically.

• Mediterranean: Battling Stormy Seas and Limited Cargo

The Mediterranean market faced pressures as the Black Sea and Eastern areas offered limited cargo options. The west side was quieter, reducing choices for vessel owners. With grain cargoes from the Black Sea remaining scarce and an increasing tonnage list, the market is expected to lose some steam in the upcoming week. Owners may need to batten down the hatches as they face uncertain conditions.

• Middle East Gulf / India (MEG/India): Steady as She Goes

The MEG/India market held steady, with a balanced supply-demand equation ensuring rates remained stable. Trips to the Atlantic were less appealing, with USTR discussions weighing heavily on decision-making. As we approach the EID holidays (March 30-31), an uptick in activity is expected, but the market is expected to hold its current course in the short term.

• Southeast Asia / Far East (SE Asia/FEast): Bullish Sentiment on the Horizon

Southeast Asia and the Far East saw a positive market trend, driven by increased steel cargoes and shipments to India in the north, alongside strong support from Australia. With a bullish sentiment continuing into the next week, expect steady activity as these regions continue to chart favorable waters.

 

Navigating a Mixed Bag of Currents

• US Gulf / US East Coast (USG/USEC): Winds of Change for Japanese Vessels

The Ultramax sector presented a mixed picture, with Chinese vessels feeling the pressure while Japanese vessels with prompt dates found themselves in a more favorable position. Operators preferred using their own tonnage, which kept rates stable. As uncertainty looms with the ongoing USTR discussions, the market may continue its current course until a clearer direction emerges.

• East Coast South America (ECSA): The Calm Before the Storm

ECSA saw a subdued week with only slight improvements in Front Haul directions early on. By week’s end, the market quieted down, and charterers scaled back their ideas. A surge in demand will be essential to get the market moving again, so the next week will depend heavily on any fresh cargo influx.

• Continent: Calm Seas, Nervous Owners

Across the continent, it was a case of calm seas but nervous owners, who found themselves with fewer options for their vessels. In some cases, they had to compete for smaller parcels against the larger Handysize vessels. Only a few trips to the US offered premium rates, but it wasn’t enough to ignite the market. Sustained demand will be key to seeing any real market momentum.

• Mediterranean: East vs. West

The Mediterranean market experienced a mixed week, with the East Med showing stronger performance than the West. US shipments provided a premium for vessels able to execute those trips. A stable cargo flow will be essential to maintaining momentum, ensuring that the Mediterranean market stays on course.

• South Africa (SAFR): Riding the Positive Winds

The South African market continued without significant changes, but there was a firm sentiment that buoyed the region. With limited volume of ballasters from India, the outlook for South Africa remains positive, signaling smoother sailing ahead.

• Middle East Gulf / India (MEG/India): Staying Steady

Like its Handysize counterpart, the MEG/India Ultramax market remained unchanged, with flat rates continuing to prevail. While there were some opportunities from South Africa, these were not enough to propel rates upwards. However, with the EID holidays approaching, there may be new developments in this area that could stir the waters.

• Southeast Asia / Far East (SE Asia/FEast): Calm Before the Eid al-Fitr festival 

The Southeast Asia and Far East markets started the week strong, but momentum slowed in the latter half due to less fresh cargo and limited activity. NOPAC was a key player in the region, but as we approach the Eid al-Fitr  holidays, expect activity to slow, with many operators taking a cautious stance.

 

Navigating Ahead: What Lies Beyond the Horizon?

As we continue to navigate these choppy seas, the Handysize and Ultramax markets are at the mercy of geopolitical currents, vessel availability, and shifting demand. While the forecast for next week remains uncertain, the discussion around USTR remains a key event to watch, as it could change the tides for the shipping industry. Stay tuned as we continue to chart the course through these dynamic waters, keeping a steady hand on the wheel and a watchful eye on the horizon.

 

 

Disclaimer

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