News in English

Large sizes pulled the freight market up

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios –Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market continued to rise again with the largest sizes posting double-digit weekly gains while the smallest sizes remained flat compared to the previous week.

Specifically, Capes rose by 24.81%, Kamsarmaxes by 11.33%, Ultramaxes (63) -1.9% and Handies -0.15%, compared to the previous week. Thus, the BDI rose by 215 credits, compared to the previous week and closed at 1633 credits on Friday, June 6.
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 limited number of vessels and strong demand for iron ore led to a strengthening of the main Australia - China route, gaining almost $ 1.5 / ton. The index levels on the Australia-China route (C5) closed on Friday at $10.45/tn.
In the Atlantic Basin, the week picked up speed in the middle of the week both in the north and south, with fewer vessels moving while the flow of cargo mainly to China improved. The indexes on Friday reached up to $24.5/tn for trips from Brazil to China (for the C3 route), while rates from Continent to Asia closed at $41.34K/day (for the C9 route) and Transatlantic round trips at $21.44K/day (for the C8 route).
Regarding Kamsarmaxes, there were upward trends in the Atlantic basin, mainly driven by the north, while South America followed, further strengthening the rates. Indicatively, the rates for trips from the East. South American Coast (ECSA) to the Far East reached up to $ 12-14 K/day (delivery Asia), from Continent to Asia at $ 16.5-18.5 K/day (delivery in Continent) and the round Transatlantic trips at $ 9.5-11.5 K/day (delivery in Gibraltar).
On the other hand, in Asia the market was positively affected by the good image of ECSA, absorbing many vessels from Southeast Asia. However, the North Pacific and Australian routes showed a recession for most of the week and only towards the end did they recover. The rates for round trips in Indonesia-Far East moved at $ 5.5-7.5 K /day (delivery Far East).
For Supramaxes-Ultramaxes, Southeast Asia started the week calmly due to various holidays and continued at the same declining pace throughout the week. UMXs rates for trips between SE Asia and the Far East went to 11-12.5K/day. Further north, in the Far East the market remained stable without any particular variations. There was a steady flow of cargo to the North Pacific and some cargo to the West Coast of America. UMXs rates for round trips in the North Pacific (NOPAC) moved to $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 remained under pressure due to the oversupply of vessels, while demand remained at low levels. Given the seasonality of the region, no improvements are expected soon. UMXs rates for Far East trips ranged between $11-12.5K/day (from Middle East Gulf (MEG) – West C. India (WCI)), for short trips between Middle East Gulf – West C. India at $11-12.5K/day and trips to the Atlantic Basin at $9.5-11K/day.
In the Atlantic Basin and especially the American Gulf returned after a week without much action. Thus, a set of cargoes to the Atlantic side disturbed the calm waters of the region while trips to Asia followed. UMXs rates for Transatlantic trips reached up to $18-19.5K/day and to Asia at $18-19.5K/day. The ECSA region showed improvements to all routes with several new cargoes and a reduction in capacity. In addition, FFAs and fuel prices provided additional support to the market. UMXs rates for trips to SE Asia-China moved to $17.5-19K/day and for Transatlantic trips (Mediterranean/Continent) at $17.5-19K/day.
Continent moved at two speeds. On the one hand, in the first half of the week there was calm, but in the second half the increase in scrap cargoes strengthened the market. In addition, many vessels from the Western Mediterranean turned their attention to work from the East Coast of America. UMXs rates for round-local trips moved at $ 9-10.5K/day, for SCRAP cargo trips to the Mediterranean at $ 12-13.5K /day and to Asia at $ 13.5-15K/day. The Mediterranean was kept more or less at the same levels thanks to cargoes to the other side of the Atlantic Basin. In addition, in the Western Mediterranean there was an increase in cargoes, further strengthening the market. 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 $ 7.5-9K/day and within the Mediterranean at $ 9-10.5K/day (excluding war zones).
In the Handies market, in Continent the market remained inactive with few new cargoes and capacity concentration, resulting in rates coming under pressure. 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 $ 10-11.5K/day and for Transatlantic trips at $ 7-8.5K/day.
The Mediterranean may have shown satisfactory levels of activity, but rates were unchanged from the previous week. Rates for larger vessels (over 36K DWT) for trips within the Mediterranean were $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 $5.5-7K/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 maintained its momentum with the supply and demand balance on the side of shipowners, since the volume of tonnage has decreased. Indicatively, the rates of the largest vessels in the category for trips to the other side of the Atlantic Basin ranged at $ 15-16.5K/day and to Asia at $ 17.5-19K/day.
The East Coast of South America (ECSA) region moved upwards with a steady flow of cargo and intense activity. It is worth noting that while the south traditionally moves at high speeds, the north followed closely behind. Thus, the rates of the largest vessels from the ECSA region for Transatlantic trips (Continent-Mediterranean) moved at $ 15.5-17K/day and to Asia at $ 14-15.5K/day.
In Asia, the north moved downwards, since the lack of new cargo was evident. Further south, some cargoes from Australia were observed at the beginning of the week, which were not replaced, resulting in a decline in rates. Further west, in the Middle East Gulf and W. C. India, the market remained balanced, maintaining rates at the same levels, while no significant differences are expected. Rates for the largest vessels in the category for round trips to the Far East and NOPAC closed at $ 8.5-10K / day, from S.E. Asia to China at $ 10.5-12K / 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