Dry bulk market unable to find new support to reach higher levels

Thursday, 31 May 2012 |
The dry bulk market has been unable to find new support and recover to higher levels during these past few days. As a result, the Baltic Dry Index (BDI) has failed to rise and instead has kept falling since the end of the previous week. Yesterday, the BDI was down by 3.65% or 36 points to 950 points. It was the seventh consecutive day of falls. The Panamax segment was the biggest loser, with the respective Baltic Panamax Index (BPI) retreating by 3.87% to 969 points, as a result of lower fixture activity in both the Atlantic and Pacific basins. Apart from the Panamax market, things are also grim in the Capesize front, with the Baltic Capesize Index retreating by 2.54%, with average daily earnings falling to just $5,292, which is the lowest in two months.
Commenting on the Capesize market, shipbroker Fearnleys mentioned in its latest weekly report that it has been heading “towards all-time lows again, as worldwide spot demand shrinks on a series of negative developments in fundamentals. With China now failing to deliver as far as raw materials imports are concerned, combined with a steady flow of new tonnage ex yard, sentiment is gloomy and the situation cannot be described as anything but dramatic. Average spot values are down 33% w-o-w, daily returns for fronthaul have dropped USD 4k to come in at USD 22k, and Pacific rounds are down 20% to USD 5600 - for those ships that are lucky enough to find cargo at all. Paper values have fallen dramatically, putting an effective stop to most period fixing - with the exception of 170k/2009 spot Singapore reportedly done for 12 months at USD 12,500 to major Europeans” said Fearnleys.

In a similar note, Shiptrade Services stated earlier that “the Atlantic market saw a significant decline on rates mainly due to lack of new requirements combined with the large volume of tonnage at the area. This was reflected on the transantlantic round which fell by USD 3,500 ending up at USD 5,000 as well as on the fronthaul trade which reported a reduction of USD 3,500 closing the week at USD 24,500. The Tubarao/Qingdao route was fixed below USD 20 pmt!, decreased even more than 50 cents. The same negative sentiment in the Pacific basin. The Australian iron ore trade showed minor movement leading the rates to downturn. Period activity remained silent with rates remained steady at around USD 12,250 levels” it mentioned.
Regarding the Panamax market, Fearnleys noted that “the week started with holidays in most European countries and in the US. With everyone back on Tuesday it was a very slow start and the market took yet another dive. It is a limited number of fresh requirements in both hemispheres and owners are starting to ballast into an already troubled Atlantic market. The ECSA grain market, which has kept the Atlantic alive the last couple of weeks, now face softening rates as the ballasters starts to appear ready for June loadings and volumes are low. TArvs now paying around USD 7-8k and the fronthauls are being fixed in the mid teens. In the Pacific as Chinese stockpiles are reported to be full and imports are slowing down rounds are being fixed at around 5k. The period market seems to evaporate as Owners ask under 8k for short period but takers are holding back and hardly anything has been done” it concluded.
On the Handy/Supra markets, Fearnleys noted that it was “another week of few signs for recovery in the Supra segment. Transatlantic voyages kept more or less stable with US Gulf positions fixing at tick below USD 25k/day. Vessels open in Skaw/Gibraltar range willing trip towards the US Gulf were paid around USD 5k. Fronthauls fixed around USD 18k/day. Pacific market has been weak and falling due to lot of prompt available ships and lack of cargoes. For Indo-India, large eco Supra now fixed at USD 6k + BB USD 60k basis APS Indo. Nickel ore cargoes are not seen in market anymore due to on-going Indo ban which has again taken away cargoes and putting pressure on market. Nopac also fixed basis APS at USD 10k + 300k BB. Indian iron ore market remains quiet with less activity on WCI & ECI. WCI-China rates around USD 9k and ECI-China around USD 7k. RBCT rv fixed at APS USD 11k + BB USD 300k. Red Sea fertilisers to India are fixed high teens. Not much activity seen on short period and rates around USD 10k for large Supra” stated Fearnleys.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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