News in English

Capes kept the BDI on an upward trajectory

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios –Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market showed a slight increase, mainly driven by Capes, which showed a double-digit increase compared to the previous week, while the other sizes moved marginally in the red. In detail, Capes rose by 10.06%, Kamsarmaxes -1.73%, Ultramaxes (63) -2.25% and Handies -1.38%, compared to the previous week. Thus, the BDI rose by 48 credits , compared to the previous week and closed at 1421 credits on Friday, May 2.
As you can see, in more detail, how the dry bulk cargo market moved last week by vessels size, starting with CAPEs. In Asia, the week started with a lot of action from miners and Operators. In addition, the absorption of several vessels provided support to the market and rates. However, at the end of the week, the lack of activity due to work limited the increase. The benchmarks on the Australia-China route (C5) closed on Friday at $8.01/tonne.
In the Atlantic Basin, the market remained stable in the south as the opposite case of demand is easy to meet from the long list of available vessels. In the north the picture was better, with enough readily available cargoes on all routes and fewer vessels compared to cargoes. Friday’s benchmarks reached up to $19.35/tonne for trips from Brazil to China (for the C3 route), while the Continent-Asia routes closed at $38.72/tonne/day (for the C9 route) and the Transatlantic round trips at $18.36/tonne/day.
Regarding Kamsarmaxes, in the Atlantic basin and particularly in the north, interest was focused on the north coast of the South American NCSA, since it supplied the market with several cargoes to Asia and the other side of the Atlantic Basin. On the contrary, the American Gulf and the South Atlantic were calmer with limited activity. Indicatively, the rates for trips from the East Coast of South America (ECSA) to the Far East reached up to $ 14-16K/day (delivery Asia), from Continent to Asia at $ 17-19K/day (delivery in Continent) and the round Transatlantic trips at $ 10-12K/day (delivery in Gibraltar).
On the other hand, in Asia the week was full of challenges for shipowners. The concentration of capacity due to minimal activity led to a sharp drop in rates, while the various holidays highlighted the situation. Rates for round trips on the Indonesia-Far East trade were at $7-9K/day (delivered Far East).
For Supramaxes-Ultramaxes, the market in Southeast Asia had a strong start to the week with several cargoes before the doors of May. UMXs rates for trips between SE Asia and the Far East went to 12.5-14K/day. Further north, in the Far East the market showed some activity at the beginning of the week with charterers in China rushing to cover their needs before the holidays at the end of the week. However, mid-week was calm as cargoes decreased. UMXs for round trips in the North Pacific (NOPAC) were at $10.5-12K/day, for trips to W. C. India at $13-14.5K/day and for return trips to the Atlantic Basin (BH) at $14-15.5K/day.
In the Middle East Gulf and West C. India the market was very active with several closures for May cargoes. It should be noted that the best closures were for trips to Bangladesh and the Far East. The UMXs' rates for Far East trips ranged from $13.5-15K/day (from Middle’s East Gulf (AG) – West C. India (WCI)), for short trips between Middles East Gulf – West C. India at $13.5-15K/day and trips to the Middle’s East Gulf, and $3-15K/day and trips to the Middles East Gulf.
In the Atlantic Basin and especially the American Gulf, improvements began to be seen. The main factors in this were the movement of vessels to the south, reducing supply significantly, and the improved flow of cargo. Thus, shipowners found an opportunity to hold back and perhaps increase their ideas. UMXs rates for Transatlantic trips reached up to $14-15.5K/day and to Asia at $14-15.5K/day. The ECSA region started the week strongly with some promising closings in the south. On the contrary, the north was under more pressure due to vessels moving from the north coast. UMXs rates for trips to SE Asia-China moved to $17.5-19K/day and for Transatlantic trips (Mediterranean/Continent) at $20-21.5K/day.
Continent started the week with the appearance of some new cargoes stimulating demand. However, the concentration of capacity in previous weeks did not allow for an increase in rates. In addition, some charterers preferred to use their own vessels. UMXs rates for round-local trips moved to $ 6.5-8K/day, for SCRAP trips to the Mediterranean at $ 8.5-10K /day and to Asia at $ 11.5-13K /day. The Mediterranean recorded some closures at the beginning of the week, however, the flow of cargoes did not renew, resulting in the remaining vessels being pressured. Vessels from the Western Mediterranean considered the possibility of moving to Latin America. Indicatively, it is reported that a UMX for a trip from the Mediterranean to Asia closed at $ 13-14.5K/day (delivery Canakkale), to the other side of the Atlantic Basin at $ 7-8.5K/day and within the Mediterranean at $ 8-9.5K/day (excluding war zones).
In the Handies market, in Continent the market continued the pattern of the previous week with oversupply of capacity and a small number of cargoes. The rates for the largest vessels in the category, for round trips, reached up to $ 7.5-9K/day, to the Mediterranean with scrap cargoes at $ 8.5-10K/day and for Transatlantic trips at $ 7.5-9K/day.
The Mediterranean moved downwards for another week as intense competition among shipowners led them to accept lower rates. The rates of larger vessels (over 36K DWT) for trips within the Mediterranean moved at $5.5-7K/day (delivery in Canakkale), to Continent at $6-7.5K/day (delivery in Canakkale), to the other side of the Atlantic Basin at $6-7.5K/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 showed a recession, which was expected since there was an oversupply of vessels and the cargo list was decreasing. Thus, the small number of closures took place at lower levels. Indicatively, the rates of the largest vessels in the category for trips to the other side of the Atlantic Basin ranged at $ 8.5-10K/day and to Asia at $ 11-12.5K/day.
The East Coast of South America (ECSA) region closed the week on the rise with some closings at higher levels compared to the previous period. In the south there was more activity compared to the north, however, it should be noted that in the middle of the week there was a downturn. Thus, the rates of the largest vessels from the ECSA region for Transatlantic trips (Continent-Mediterranean) moved at $ 15-16.5K/day and to Asia at $ 14-15.5K/day.
In Asia, the week passed calmly due to the continuous holidays in various places, such as Japan and China. However, in the north some charterers tried to cover their requirements in the interim even with slightly higher rates. Further west in the Gulf of the Middle East and W. C. India, the week may have ended calmly but there has been a lot of activity in the previous days with several return trips and even in higher numbers. The rates of the largest vessels in the category for round trips in the Far East and NOPAC closed at $ 8-9.5K / day, from SE Asia to China at $ 8-9.5K / day and from West C. India to China at $ 7.5-9K / day.

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