News in English

New rise in Capes, stability in other sizes

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios –Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market showed an increase due to Capes whose weekly gains approached 20%. On the contrary, the smaller sizes showed small fluctuations, compared to the previous week. Specifically, Capes rose by 18.11%, Kamsarmaxes -4.65%, Ultramaxes (63) +0.91% and Handies -0.04%, compared to the previous week. Thus, the BDI rose by 89 credits , compared to the previous week and closed at 1388 credits on Friday, May 16.
Let's see, in more detail, how the dry bulk cargo market moved last week by vessel size, starting with the CAPEs. In Asia, the Singapore holiday at the beginning of the week slowed down the pace but did not affect the positive mood as the number of available vessels remained stable and the flow of cargo continued. At the same time, the three major miners were active in the middle of the week. The index levels on the Australia-China route (C5) closed on Friday at $8.2/tn.
In the Atlantic Basin, and especially in the south, various operational issues in ports and vessels moving from Asia exerted pressure. However, during the week, demand from southern Brazil and western Africa increased. At the same time, in the north, reduced supplies capacity strengthened rates. Friday's indexes reached up to $19.41/tn for trips from Brazil to China (for route C3), while rates from Continent to Asia closed at $38.72K/day (for route C9) and Transatlantic round trips at $17.04K/day (for route C8).
Regarding Kamsarmaxes, in the Atlantic basin and particularly in the north, the week started with interest focusing on Transatlantic grain trips from the North Coast of South America (NCSA). In the south, the picture was much better with charterers being more active and trips to Asia gaining almost 1K/day from the previous week. Indicatively, rates for trips from the East Coast of South America (ECSA) Americas (ECSA) to the Far East reached up to $12.5-15.5K/day (delivery Asia), from Continent to Asia at $16-18K/day (delivery in Continent) and the round Transatlantic trips at $11-13K/day (delivery in Gibraltar).
On the other hand, in Asia we saw a slow start to the week with Singapore having a holiday. At the end of the week we saw more cargoes mainly of coal from Indonesia and Australia and a decreasing number of vessels leaving a note of optimism for the following week. The rates for round trips on Indonesia-Far East moved at $11-13K/day (delivery Far East).
For Supramaxes-Ultramaxes, in Southeast Asia coal cargoes decreased while the poor image of the north led many vessels to be transferred further south, adding additional pressure. UMXs rates for trips between SE Asia and the Far East went to 11.5-13K/day. Further north, in the Far East the market continued to move at low speeds especially in the north. Cargoes to the Atlantic Basin were limited while on the other hand the support from the North Pacific did not seem to be enough to raise rates. UMXs rates for round trips in the North Pacific (NOPAC) were $10.5-12K/day, for trips to W. C. India $13.5-15K/day and return trips to the Atlantic Basin (BH) $14-15.5K/day.
In the Middle East Gulf and West C. India the market showed signs of fatigue with the number of vessels remaining high and new cargoes less. Thus shipowners were forced to limit their ideas in order to remain competitive. Rates for UMXs for Far East trips ranged from $13.5-15K/day (from Middle’s East Gulf (AG) – West Cz Indies (WCI)), for short trips between Middle East Gulf – West Cz India from $13-14.5K/day and trips to the Atlantic Basin from $12-13.5K/day.
The Atlantic Basin and especially the American Gulf were quiet as attention was focused on Denmark. However, the climate has changed following the stability prevailing in China-US relations. Thus, trips to Asia were particularly preferable for shipowners. Rates for UMXs for Transatlantic trips reached up to $16-17.5K/day and to Asia from $17.5-19K/day. The ECSA region was slow as most operators appeared to be based in Denmark. Demand was therefore limited in all directions. UMXs rates for trips to SE Asia-China were at $19-20.5K/day and for Transatlantic trips (Mediterranean/Continent) at $19.5-21K/day.
Continent moved at the pace of Copenhagen. However, demand remained at satisfactory levels and some closures were made at marginal but higher numbers compared to the previous week. UMXs rates for round-local trips moved at $ 7-8.5K/day, for trips with SCRAP cargoes to the Mediterranean at $ 10.5-12K/day and to Asia at $ 13.5-15K/day. The Mediterranean moved at two speeds. On the one hand, in the Eastern Mediterranean, demand was low and on the other hand, in the Western region, there was an increase for trips to Asia. 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 $ 8-9.5K/day (excluding war zones).
In the Handies market, in Continent the market proceeded without any particular changes with activity decreasing. A positive point is the fact that the expected offered capacity is limited. The rates for the largest vessels in the category, for circular trips, reached up to $ 7.5-9K/day, to the Mediterranean with scrap cargo at $ 8.5-10K/day and for Transatlantic trips at $ 8-9.5K/day.
The Mediterranean presented very limited options for shipowners as most brokers and charterers were based in Copenhagen. The rates for larger vessels (over 36K DWT) for trips within the Mediterranean were $5.5-7K/day (delivery in Canakkale), to Continent $6-7.5K/day (delivery in Canakkale), to the other side of the Atlantic Basin $6-7.5K/day (delivery in Canakkale) and to Asia $8-9.5K/day.
On the other side of the Atlantic Basin , in the American Gulf, the market did not show much activity as the charterers were based in Copenhagen. The majority of the closures were for trips charters. Indicatively, the rates of the largest vessels in the category for trips to the other side of the Atlantic ranged at $ 9.5-11K/day and to Asia at $ 11-12.5K/day.
The East Coast of South America (ECSA) region showed a lot of activity despite the event in Denmark. However, the concentration of capacity and the lack of new cargo, especially in the north, put pressure on rates. 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 south showed a better picture than the north, led by a flow of cargo from Australia. In the north, the available vessels were seeing the same numbers as the previous week. Further west in the Gulf of the Middle East and W. C. India there was plenty of action. The lack of vessels put pressure on charterers who had to fill their positions. The rates of the largest vessels in the category for round trips to the Far East and NOPAC were closing at $ 8.5-10K / day, from SE Asia to China at $ 8.5-10K / 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