News in English

Large fluctuations for large sizes in the dry bulk cargo market

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios –Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market progressed positively with Capes showing a weekly increase of almost 20% while Panamaxes recorded double-digit losses. At lower levels, the differences were in single digits, compared to the previous week. Specifically, Capes rose by 19.85%, Kamsarmaxes -10.21%, Ultramaxes (63) -3.24% and Handies +3.45%, compared to the previous week. Thus, the BDI rose by 78 credits , compared to the previous week and closed at 1418 credits on Friday, May 30.
Let's see, in more detail, how the dry cargo market moved last week by vessel size, starting with the CAPEs. Asia was active with a satisfactory flow of cargo from miners and a small list of vessels, gaining more than half a dollar per ton in the main C5 route during the week. The index levels on the Australia-China route (C5) closed on Friday at $8.95/tn.
In the Atlantic Basin, and especially in the south, it starred with the main route from southern Brazil to China climbing to $22 per ton. And in the north, trips to Asia showed particular interest, followed by the Transatlantic. The indexes on Friday reached up to $22/tn for trips from Brazil to China (for the C3 route), while the rates from Continent to Asia closed at $37K/day (for the C9 route) and the Transatlantic round trips at $17.68K/day (for the C8 route).
Regarding Kamsarmaxes, in the Atlantic basin and particularly in the north, the week passed with several interruptions at the beginning and towards the end, maintaining a subdued climate. Mineral cargoes to the other side of the Atlantic Basin were limited and only cargoes to Asia showed a marginal increase. In the south, Latin America had a better picture especially for the beginning of June, on the contrary, pressures are expected in the second half of the month. Indicatively, the rates for trips from the East Coast of South America (ECSA) to the Far East reached up to $ 11.5-13.5 K/day (delivery Asia), from Continent to Asia at $ 15-17 K/day (delivery in Continent) and the round Transatlantic trips at $ 7.5-9.5 K/day (delivery in Gibraltar).
On the other hand, in Asia the market was in free fall as there was a concentration of capacity and a shortage of cargoes from both the North Pacific and Australia. Roundtrip rates for Indonesia-Far East trades were at $5-7K/day (Far East delivery).
For Supramaxes-Ultramaxes, Southeast Asia remained stagnant and scepticism prevailed as coal cargoes were not sufficient and Australia did not provide much support. UMXs rates for trades between SE Asia and the Far East went to $10-11.5K/day. Further north, in the Far East the market progressed without any significant changes. In the North Pacific, rates remained flat, but there were improvements in steel cargoes destined for the Atlantic Basin as well as in clinker cargoes to the West Coast of Central America (WCCA). UMXs rates for round trips in the North Pacific (NOPAC) were at $10.5-12K/day, for trips to W. C. India at $12.5-14K/day and return trips to the Atlantic Basin (BH) at $12-13.5K/day.
In the Middle East Gulf and West C. India, the market showed a significant decline. As we approach the EID holidays, several cargoes were frozen, resulting in reduced demand. Rates for UMXs to the Far East ranged from $13.5-15K/day (from Middle East Gulf (MEG) – West C. India (WCI)), for short trips between Middle East 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 mixed trends, as at the beginning of the week it moved ahead at a strong pace from the previous high closes for both trips to the Mediterranean and to Asia. However, the steady flow of capacity led to a decline in rates. UMXs to the Transatlantic reached up to $17.5-19K/day and to Asia from $16.5-18K/day. The ECSA region moved at low speeds. At the beginning of the week most cargoes were covered and not renewed, resulting in a drop in rates. Demand for trips to Asia was better, however, oversupply left no room for improvements in numbers. UMXs rates for trips to SE Asia-China were at $17-18.5K/day and for Transatlantic trips (Mediterranean/Continent) at $16.5-18K/day.
Continent fell marginally due to the lack of new cargo and the small increase in the number of vessels. It is worth noting that there was increased interest in season charters. UMXs rates for round-local trips moved at $ 7-8.5K/day, for SCRAP trips to the Mediterranean at $ 11.5-13K /day and to Asia at $ 13.5-15K /day. The Mediterranean was pressured by declining demand, as a result of which shipowners with open vessels were forced to limit their ideas. 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 $ 7-8.5K/day and within the Mediterranean at $ 11.5-13K/day (excluding war zones).
In the Handies market, in Continent the market was unable to maintain the momentum of the previous week since the volume of new cargoes was limited. Cargoes have started to appear for June, however, there are no clear signs of how the market will move. The rates for the largest vessels in the category, for round trips, reached up to $ 8-9.5K/day, to the Mediterranean with scrap cargoes at $ 9.5-11K/day and for Transatlantic trips at $ 7.5-9K/day.
The Mediterranean showed an increased volume of cargo in the Western Mediterranean. However, it was not enough to reverse the negative trend of rates since the competition of shipowners was intense. 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 signs of recovery with the supply of vessels after a long time receding. Indicatively, the rates of the largest vessels in the category for trips to the other side of the Atlantic Basin ranged at $ 14-15.5K/day and to Asia at $ 17.5-19K/day.
The East Coast of South America (ECSA) region remained under pressure despite the increased demand for transatlantic cargoes, since there were many immediately available vessels looking for some employment. However, the signs are positive for the next month. 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, calm prevailed both in the north and in the south with minimal fluctuations in rates and limited activity. Further west, in the Gulf of the Middle East and W. C. India there was a lot of activity with many discussions which however did not materialize into a closing. 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 $ 11.5-13K / 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