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The dry bulk cargo market moved forward with minor corrections

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios –Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market showed small corrections in all sizes. However, the largest sizes showed marginal losses while the smallest moved in the green, compared to the previous week. In detail, Capes decreased by 5.85%, Kamsarmaxes -3.39%, Ultramaxes (63) +0.53% and Handies +4.87%, compared to the previous week. Thus, the BDI fell by 48 credits, compared to the previous week and closed at 1340 credits on Friday, May 23.
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, increased activity from miners and operators led to an increase in the indexes. In fact, the main index of the C5 region gained over 0.3 $ / ton during the week. The index levels on the Australia-China route (C5) closed on Friday at $8.55/tn.
In the Atlantic Basin, and especially in the south, the market started the week calmly but in the middle it picked up speed with more cargo for mid-June. On the contrary, in the north the picture was worse as the limited trucks both to the other side of the Atlantic Basin and to Asia changed the climate for the worse. The indexes on Friday reached up to $18.84/tn for trips from Brazil to China (for the C3 route), while rates from Continent to Asia closed at $33.81K/day (for the C9 route) and Transatlantic round trips at $15.32K/day (for the C8 route).
Regarding Kamsarmaxes, in the Atlantic basin the week started sluggishly, however activity quickly recovered with more cargoes both to Asia and to the other side of the Atlantic Basin. Further south, in Latin America, increased figures were observed for June cargoes. Indicatively, rates for trips from the East Coast of South America (ECSA) to the Far East reached up to $ 13-15K/day (delivery Asia), from Continent to Asia at $ 16-18K/day (delivery in Continent) and round Transatlantic trips at $ 8.5-10.5K/day (delivery in Gibraltar).
On the other hand, mixed trends were observed in Asia, with a slow start and end of the week but a better picture in the interim. The main feature of the market was the difference in dates between cargoes and vessel availability. Round trips Indonesia-Far East were priced at $10.5-12.5K/day (Far East delivery).
For Supramaxes-Ultramaxes, Southeast Asia declined due to excess capacity supply, while coal cargoes from Indonesia were limited. Some support came to the market from Australia with some grain and salt cargoes. 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 downward trends with the North Pacific moving at low speeds. In addition, there was a shortage of steel cargoes to the Atlantic Basin. UMXs rates for round trips in the North Pacific (NOPAC) were at $10.5-12K/day, for trips to W. C. India at $13.5-15K/day and return trips to the Atlantic Basin (BH) at $13-14.5K/day.
In the Middle East Gulf and West C. India the market proceeded without any particular variations. A concentration of vessels was observed in the region, but the various operational problems created by the monsoons kept several vessels busy. Rates for UMXs for Far East trips ranged between $13.5-15K/day (from Middle East’s Gulf (MEG) – West C. India (WCI)), for short trips between Middle East’s Gulf – West C. India from $13-14.5K/day and trips to the Atlantic Basin from $9.5-11K/day.
The Atlantic Basin and especially the American Gulf showed considerable mobility after charterers returned from Copenhagen. Thus we saw more cargoes mainly of coal and petcoke, both to Asia and to the other side of the Atlantic Basin. Rates for UMXs for Transatlantic trips reached up to $17.5-19K/day and to Asia from $17.5-19K/day. The ECSA region proceeded without any major changes with most of the May cargoes covered and the focus on the June cargoes. In addition, there was a satisfactory flow of cargoes from the river but the route to Asia was calm. UMXs rates for trips to SE Asia-China moved at $ 18-19.5K/day and for Transatlantic trips (Mediterranean/Continent) at $ 19.5-21K/day.
Continent showed signs of recovery after a period of calm and pressure, thanks to reduced capacity which led to some closures at higher numbers compared to the previous week. UMXs rates for round-local trips were at $7.5-9K/day, for SCRAP trips to the Mediterranean at $12.5-14K/day and to Asia at $14.5-16K/day. The Mediterranean was boosted at the beginning of the week by some late May cargoes from both the western and eastern sides of the basin. Towards the middle of the week and after these cargoes had been covered, a balance prevailed. Indicatively, it is reported that a UMX for a trip from the Mediterranean to Asia closed at $ 13.5-15K/day (delivery Canakkale), to the other side of the Atlantic Basin at $ 6-7.5K/day and within the Mediterranean at $ 8.5-10K/day (excluding war zones).
In the Handies market, in Continent the market seemed to change course and show improvements in terms of activity. Thus we saw small improvements in rates. The rates for the largest vessels in the category, for round trips, reached up to $ 8-9.5K/day, to the Mediterranean with scrap cargo at $ 10.5-12K/day and for Transatlantic trips at $ 8-9.5K/day.
The Mediterranean moved at two speeds. On the one hand, the Western Mediterranean, which showed more cargo, and on the other hand, the Black Sea, where the gap between shipowners' and charterers' offers led to a drop in the volume of closures. The rates of larger vessels (over 36K tons DWT) for trips within the Mediterranean moved at $ 6.5-8K/day (delivery in Canakkale), to Continent at $ 6.5-8K/day (delivery in Canakkale), to the other side of the Atlantic Basin at $ 6.5-8K/day (delivery in Canakkale) and to Asia at $ 8.5-10K/day.
On the other side of the Atlantic Basin, in the American Gulf, the market showed an increase in activity mainly from mid-week onwards. The continuous flow of cargo from both the east coast and the gulf strengthened the rates. Indicatively, the rates of the largest vessels in the category for trips to the other side of the Atlantic Basin ranged between $ 11.5-13K/day and to Asia at $ 12.5-14K/day.
The East Coast of South America (ECSA) region presented balance and stability with several closures at the previous week's levels. Demand increased but the increase in supply left no room for an increase in rates. Thus, the rates of the largest vessels from the ECSA region for Transatlantic trips (Continent-Mediterranean) ranged at $ 15-16.5K/day and to Asia at $ 14-15.5K/day.
In Asia and especially in the north, the market maintained its momentum as there was a balance between supply and demand. A similar picture was seen in the south where there was optimism thanks to stable demand from Australia. Further west, in the Gulf of the Middle East and W. C. India, a balance between supply and demand was observed, keeping rates at the same levels. Rates for the largest vessels in the category for round trips to the Far East and NOPAC closed at $ 10.5-12K / day, from SE Asia to China at $ 12.5-14K / day and from West C. India to China at $ 8-9.5K / day.

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