News in English

Capes dropped BDI

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios –Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market declined due to the large drop in Capes, while the other sizes moved in the green, compared to the previous week. Specifically, Capes fell by 22.90%, Kamsarmaxes +10.37%, Ultramaxes (63) +3.65% and Handies +1.96%, compared to the previous week. Thus, the BDI fell by 168 credits, compared to the previous week and closed at 1521 credits on Friday, June 27.
Let's see, in more detail, how the dry bulk cargo market moved last week by vessels size, starting with the CAPEs. In Asia, the absence of the three main miners from the market led to a concentration of capacity and a drop in rates. There were some coal cargoes from Eastern Australia but they were not enough to reverse the climate. The index levels on the Australia-China route (C5) closed on Friday at $6.67/tn.
In the Atlantic Basin and particularly in the south, Brazil and West Africa showed increases in some cases for trips to China. However, the general trends were downward. The north showed more stability with several new cargoes and a balanced supply of vessels. The indexes on Friday reached up to $20.91/tn for trips from Brazil to China (for the C3 route), while rates from Continent to Asia closed at $43.06K/day (for the C9 route) and Transatlantic round trips at $24.82K/day (for the C8 route).
Regarding Kamsarmaxes, in the Atlantic basin and particularly in the north there was a steady flow of cargo and a decreasing supplied capacity. Both Continent and the North Coast of South America had several grain cargoes. In the south, the market moved positively with increased activity, mainly for the last twenty days of July. Indicatively, rates for trips from the East Coast of South America (ECSA) to the Far East reached up to $ 12.5-14.5 K/day (delivery Asia), from Continent to Asia at $ 19-21 K/day (delivery in Continent) and round Transatlantic trips at $ 12-14 K/day (delivery in Gibraltar).
On the other hand, in Asia, the lack of readily available vessels helped the market mainly for routes from Eastern Australia. However, the decline in Capes rates played a negative role, thus intensifying competition from larger sizes. Roundtrip rates for Indonesia-Far East trades were at $11.5-13.5K/day (Far East delivery).
For Supramaxes-Ultramaxes, Southeast Asia performed positively, driven by developments in the Middle East and cargo from Indonesia. UMXs rates for trades between SE Asia and the Far East went to $10.5-12K/day. Further north, in the Far East, the market showed a marginal increase, mainly due to the fact that some shipowners requested a large premium to book cargo to the Arabian Gulf. In contrast, the North Pacific remained sluggish. UMXs rates for round trips in the North Pacific (NOPAC) were $10-11.5K/day, for trips to W. C. India at $12-13.5K/day and return trips to the Atlantic Basin (BH) at $12.5-14K/day.
In the Middle East Gulf and West C. India the market showed an improvement in sentiment due to improved activity and several vessels found some employment. However, these improvements were not reflected in rates. Rates for UMXs for Far East trips ranged between $11.5-13K/day (from Middle East Gulf (MEG) – West C. India (WCI)), for short trips between Middle East Gulf – West C. India from $12-13.5K/day and trips to the Atlantic Basin from $9-10.5K/day.
The Atlantic Vasin and especially the American Gulf experienced a quiet week with limited activity and demand. It should be noted that most shipowners preferred to avoid the Eastern Mediterranean. Rates for UMXs for Transatlantic trips reached up to $19.5-21K/day and to Asia from $18.5-20K/day. The ECSA region continued to be on the side of shipowners as rates increased for both Asia and transatlantic trades. Especially in the north there was a reduction in capacity supply. UMXs rates for SE Asia-China trades were at $21.5-23K/day and for Transatlantic trades (Mediterranean/Continent) at $21.5-23K/day.
Continent showed a tight capacity for the first days of July. UMXs rates for round-local trips were at $10.5-12K/day, for trips with SCRAP cargo to the Mediterranean at $13-14.5K/day and to Asia at $14-15.5K/day. The Mediterranean showed upward trends due to the reduction in capacity in the Western Mediterranean. Thus, shipowners who had a ship in the region increased their ideas. On the contrary, in the Eastern Mediterranean the rates were lower since the demand was limited. Indicatively, it is reported that a UMX for a trip from the Mediterranean to Asia closed at $ 12.5-14K/day (delivery Canakkale), to the other side of the Atlantic Basin at $ 7.5-9K/day and within the Mediterranean at $ 10-11.5K/day (excluding war zones).
In the Handies market, the market in Continent was calm with demand remaining at low levels. However, several vessels moved to the other side of the Atlantic Basin, limiting the number of vessels. The rates for the largest vessels in the category, for round trips, reached up to $ 7-8.5K/day, to the Mediterranean with scrap cargo at $ 9-10.5K/day and for Transatlantic trips at $ 5-6.5K/day.
The Mediterranean showed a downward trend despite the fact that demand increased in July, but there is still no balance in the market. The rates of larger vessels (over 36K DWT) for trips within the Mediterranean moved at $ 7-8.5K/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 $ 9-10.5K/day.
On the other side of the Atlantic Basin, in the American Gulf, the market moved slowly and only towards the end of the week showed an increase. This resulted in a concentration of capacity which put pressure on the rates. Indicatively, the rates of the largest vessels in the category for trips to the other side of the Atlantic Basin ranged at $ 15-16.5K/day and to Asia at $ 17.5-19K/day.
The East Coast of South America (ECSA) region maintained its momentum for cargoes in the first fortnight of the following month due to the lack of vessels. In addition, there was a steady flow of cargo. Thus, the rates of the largest vessels from the ECSA region for Transatlantic trips (Continent-Mediterranean) ranged at $ 17.5-19K/day and to Asia at $ 17-18.5K/day.
In Asia, the lack of capacity and the situation in the Middle East helped rates to move upwards, both in the north and in the south. Further west India and the Middle East Gulf, two speeds were observed. On the one hand, W. C. India continued without any particular changes while on the other hand, the Gulf recorded an impetus. The rates of the largest vessels in the category for round trips to the Far East and NOPAC closed at $ 9.5-11K / day, from SE Asia to China at $ 11-12.5K / day and from West C. India to China at $ 6.5-8K / day.

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