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The dry bulk cargo market continued to decline

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios-Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market continued to decline with new losses, with all sizes showing single-digit weekly losses, except for Capes which exceeded 10%. Specifically, Capes fell by 10.23%, Kamsarmaxes -4.81%, Ultramaxes (63) -2.39% and Handies -0.2%, compared to the previous week. Thus, the BDI fell by 113 credits , compared to the previous week and closed at 1489 credits on Friday, April 4.
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 week started at a low pace due to the holidays in Singapore, but in the middle of the week activity returned clearly improved with the three main miners being active. The index levels on the Australia-China route (C5) closed on Friday at $8.78/tn.
In the Atlantic Basin and particularly in the south, the week started at the same levels as the previous one ended, but declined in the middle of the week despite a stable supply of vessels . In the north, there was an increase in activity mainly for transatlantic trips, but these did not translate into closures, resulting in a decline in rates. The indexes on Friday reached up to $21.82/tn for trips from Brazil to China (for the C3 route), while rates from Continent to Asia closed at $38.53 K/day (for the C9 route) and Transatlantic round trips at $15.86K/day (for the C8 route).
Regarding Kamsarmaxes, in the Atlantic basin and particularly in the north, a slow start to the week was observed due to the holidays in Singapore and continued at the same decreasing rate due to the lack of demand. Only towards the end of the week was an increase observed mainly for trips from northern Continent to Asia. In the south, the market followed the upward trend from the previous week. However, downward corrections were noted towards the end of the week. Indicatively, rates for trips from the East Coast of South America (ECSA) to the Far East reached up to $ 16-18K/day (delivery Asia), from Continent to Asia at $ 16.5-18.5K/day (delivery in Continent ) and the round Transatlantic trips at $ 9.5-10.5K/day (delivery in Gibraltar).
On the other hand, in Asia the week was short due to the holidays on Monday in Singapore and Friday in China. Supplied capacity ncreased while most charterers preferred to wait for the developments of the USTR. Roundtrip rates on Indonesia-Far East trades were at $14-16K/day (delivered Far East).
For Supramaxes-Ultramaxes, in Southeast Asia the supply and demand were in balance. However, a downturn occurred at the end of the week. UMXs rates on SE Asia-Far East trades went to $11-12.5K/day. Further north, in the Far East the market showed minor corrections. Atlantic and North Pacific trades were stable, while Japanese vessels continued to command a premium on trades to the Americas. UMXs rates for round trips in the North Pacific (NOPAC) were at $11-12.5K/day, for trips to W. C. India at $13-14.5K/day and return trips to the Atlantic Basin (BH) at $14-15.5K/day.
In the Middle East Gulf and West C. India the market gained significant ground due to the limited number of available vessels , while there was also support from the South African market which absorbed some of the vessels. Rates for UMXs for trips to the Far East ranged between $12.5-14K/day (from Middle East Gulf (MEG) – West C. India (WCI)), for short trips between Middle East Gulf – West C. India from $11-12.5K/day and trips to the Atlantic Basin from $10-11.5K/day.
In the Atlantic Basin and especially the American Gulf, activity improved as shipowners and charterers showed willingness to proceed with some chartering. Demand for trips to the other side of the Atlantic Basin increased. UMXs for Transatlantic trips reached up to $15.5-17K/day and to Asia from $15-16.5K/day. The ECSA region started the week with more activity and some new cargoes mainly for the other side of the Atlantic Basin. However, there was a shortage of cargoes with close loading dates creating a two-speed market. UMXs rates for trips to SE Asia-China were in the $18-19.5K/day range and for Transatlantic trips (Mediterranean/Continent) in the $18-19.5K/day range.
Continent was pressured by lack of demand and increased capacity at the beginning of the week. There was uncertainty in the market for the immediate future but the signs are positive for May. UMXs rates for round-local trips were at $10.5-12K/day, for SCRAP trips to the Mediterranean at $13-14.5K/day and to Asia at $15.5-17K/day. The Mediterranean may have seen a large reduction in cargo from the Western Mediterranean, however increased demand for trips to the Americas helped to fill the gap. 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 $ 8-9.5K/day and within the Mediterranean at $ 9-10.5K/day (excluding war zones).
In the Handies market, in Continent the market lost ground due to the lack of cargo mainly for the largest vessels . In general there is uncertainty although the signs are positive for the May cargoes. The rates for the largest vessels in the category, for circular trips reached up to $ 11-12.5K/day, to the Mediterranean with scrap cargo at $ 12-13.5K/day and for Transatlantic trips at $ 8.5-10K/day.
The Mediterranean was quiet with declining activity. The lack of grain cargoes was partly replaced by cement and steel cargoes, but this was not enough to keep rates at the same levels. Rates for larger vessels (over 36K DWT) for trips within the Mediterranean were at $7-8.5K/day (delivery in Canakkale), to Continent at $6-7.5K/day (delivery in Canakkale), to the other side of the Atlantic Basin at $8-9.5K/day (delivery in Canakkale) and to Asia at $8-9.5K/day.
On the other side of the Atlantic Basin , in the American Gulf, the market slowed down since most vessels and cargoes are closed. Now the focus is on the second half of April and mainly on the west coast, with charterers avoiding Chinese vessels . Indicatively, the rates of the largest vessels in the category for trips to the other side of the Atlantic Basin ranged at $ 10-11.5K/day and to Asia at $ 13.5-15K/day.
The East Coast of South America (ECSA) region remained at the same levels even though activity improved at the end of the week. However, demand remained at healthy levels and therefore we expect the market to continue at the same pace next week. Thus, the rates of the largest vessels from the ECSA region for Transatlantic trips (Continent -Mediterranean) ranged at $ 13.5-15K/day and to Asia at $ 13-14.5K/day.
In Asia, activity in the south was sluggish, due to various events at the beginning of the week. In addition, the lack of cargo gave the upper hand to charterers. In the north, the picture was better, as stabilizing trends were observed. Several shipowners, reducing their ideas, found some employment. Further west, in the Middle East Gulf and W. C. India, the market proceeded without any particular changes, as there was no significant movement. The rates of the largest vessels in the category for round trips in the Far East and NOPAC closed at $ 9-10.5K / day, from SE Asia to China at $ 9.5-11K / 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