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Stability 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 proceeded without any significant changes in all sizes compared to the previous week. Specifically, Capes increased by only 1.4%, Kamsarmaxes -0.56%, Ultramaxes (63) +4.06% and Handies +0.75%, compared to the previous week. Thus, the BDI rose by only 33 credits, compared to the previous week and closed at 2051 credits on Friday, August 8.
Let's see, in more detail, how the dry bulk cargo market moved last week by vessels size, starting with the CAPEs. In Asia, despite the steady mobility from the three main miners, rates showed fluctuations during the week that reached a difference of one dollar per ton. The index levels on the Australia-China route (C5) closed on Friday at 10.6 $/tn.
In the Atlantic Basin and particularly in the south, both Brazil and West C. Africa took out several cargoes to China. Thus, rates gained $1.5 per ton. In the North Atlantic, the week started slowly but gained ground in the middle with several new cargoes for both transatlantic trips and to Asia. Friday's indexes reached up to $25.02/tn for trips from Brazil to China (for the C3 route), while rates from Continent to Asia closed at $50.19K/day (for the C9 route) and Transatlantic round trips at $29.68K/day (for the C8 route).
Regarding Kamsarmaxes, in the Atlantic basin and particularly in the north, rates fell as cargo availability was limited and the offered capacity began to increase. On the contrary, in the south the Brazil-China route showed positive trends due to the limited number of available vessels. Indicatively, the rates for trips from the East Coast of South America (ECSA) to the Far East reached up to $ 13-15 K/day (delivery Asia), from Continent to Asia at $ 21.5-23.5 K/day (delivery in Continent ) and the round Transatlantic trips at $ 15-17 K/day (delivery in Gibraltar).
On the other hand, in Asia the market moved slowly but showed a positive picture. Although activity was sluggish, discussions and closings were at slightly higher levels. The protagonist in this change of climate was Australia. Roundtrip rates for Indonesia-Far East trades were at $16-18K/day (Far East delivery).
For Supramaxes-Ultramaxes, Southeast Asia showed marginal improvements driven by coal cargoes from Indonesia. The mood also improved further during the week. UMXs rates for trades between SE Asia and the Far East went to $14-15.5K/day. Further north, in the Far East the market started the week with several new cargoes from the North Pacific, however, rates eased mid-week. UMXs for round trips in the North Pacific (NOPAC) were $12.5-14K/day, for trips to W. C. India $14.5-16K/day and for return trips to the Atlantic Basin (BH) $14-15.5K/day.
In the Middle East Gulf and West C. India the market showed marginal losses despite the fact that the favorable climate remained. UMXs for trips to the Far East were $13.5-15K/day (from Middle’s East Gulf (MEG) – West C. India (WCI)), for short trips between Middle East Gulf – West C. India $14.5-16K/day and for trips to the Atlantic Basin $10-11.5K/day.
In the Atlantic Basin and especially the American Gulf, it rose thanks to the premium offered by the routes to W. C. India and the Eastern Mediterranean. UMXs rates for Transatlantic trips reached up to $ 25.5-27K/day and to Asia at $ 27-28.5K/day. The ECSA region moved upwards with a steady flow of cargoes in the north. On the contrary, the south was calmer, although the largest vessels in the sector benefited from some cargoes for Panamaxes. West C. Africa also gave some alternatives to shipowners. UMXs rates for trips to SE Asia-China moved at $ 23.5-25K/day and for Transatlantic trips (Mediterranean/Continent) at $ 23-24.5K/day.
Continent seemed to be affected by the positive course of the American Gulf. Thus, several vessels were transferred to the other side of the Atlantic Basin. The reduction in capacity supply in combination with the appearance of some cargoes increased their regional rates. UMXs rates for round-local trips moved to $ 13-14.5K/day, for trips with SCRAP cargoes to the Mediterranean to $ 15.5-17K/day and to Asia to $ 18.5-20K/day. The Mediterranean benefited from the upward course of the regions on the other side of the Atlantic Basin but also the continuous flow of cargoes to the Western side of the Mediterranean. Indicatively, it is reported that a UMX for a trip from the Mediterranean to Asia closed at $ 17.5-19K/day (delivery Canakkale), to the other side of the Atlantic Basin at $ 11.5-13K/day and within the Mediterranean at $ 13-14.5K/day (excluding war zones).
In the Handies market, in Continent the market showed intense activity with grain cargoes from the Baltic to West Africa being the main drivers. However, the oversupplied capacity prevented some increase in rates. Rates for the largest vessels in the category, for round trips, reached up to $ 10-11.5K/day, to the Mediterranean with scrap cargoes at $ 10-11.5K/day and for Transatlantic trips at $ 8-9.5K/day.
The Mediterranean was pressured by the lack of cargo. In addition, charterers preferred to use their own for their cargoes, further burdening the rate market. The rates of larger vessels (over 36K tons DWT) for trips within the Mediterranean moved at $ 9-10.5K/day (delivery in Canakkale), to Continent at $ 8-9.5K/day (delivery in Canakkale), to the other side of the Atlantic Basin at $ 7-8.5K/day (delivery in Canakkale) and to Asia at $ 12.5-14K/day.
On the other side of the Atlantic Basin, in the American Gulf, the market started the week dynamically with some good closings. However, the continuation was not proportional as the rates fell. 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 $ 15.5-17K/day.
The East Coast of South America (ECSA) region moved at 2 speeds. On the one hand, shipowners with immediate cash were forced to accept lower rates to book their vessels. On the other hand, vessels that open in mid-August have the luxury of time to preserve their ideas. 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 $ 16.5-18K/day.
In Asia and especially in the north, balance and calm prevailed with rates maintained at satisfactory levels. In the south, pressures were observed with several vessels being spotted. Further west, in the Middle East Gulf and W. C. India, the lack of activity and the oversupply of vessels kept rates at the same levels or in some cases even showed a decline. The rates of the largest vessels in the category for round trips in the Far East and NOPAC closed at $ 11-12.5K / day, from SE Asia to China at $ 12-13.5K / 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