News in English

Marginal rise for the dry cargo market

Iakovos (Jack) Archontakis
Commercial Director TMC MARITIME CO.

Dr. Fotios –Evangelos Karlis
Maritime Executive and Consultant

The dry bulk cargo market moved in the green with the weekly increase in Capes being double-digit while the other sizes had marginal fluctuations, compared to the previous week. Specifically, Capes rose by 11.97%, Kamsarmaxes -8.04%, Ultramaxes (63) -0.19% and Handies +1.37%, compared to the beginning of the previous month. Thus, the BDI rose by 77 credits, compared to the previous week and closed at 2203 credits on Friday, September 19.
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 week started slowly, but increased activity from miners and demand for coal cargoes helped the market strengthen, with rates gradually reaching even $11/tonne. The index levels on the Australia-China route (C5) closed on Friday at $10.94/tonne.
Mixed trends were observed in the Atlantic Basin, and especially in the south. On the one hand, loadings for early October showed pressure, while the picture was better for the middle of the month. In the north, the market moved at an increased pace with satisfactory demand both for trips to Asia and to the other side of the Atlantic Basin. Friday's indexes reached up to $24.77/tn for trips from Brazil to China (for route C3), while rates from Continent to Asia closed at $49.13K/day (for route C9) and Transatlantic round trips at $28.9K/day (for route C8).
Regarding Kamsarmaxes, in the Atlantic basin both in the north and in the south, shipowners with vessels available at the beginning of October faced problems finding some cargo as demand was limited. Similarly, in the south, shipowners had to significantly reduce their ideas in order to close their vessels. Indicatively, rates for trips from the East Coast of the S. Americas (ECSA) to the Far East reached up to $15-17K/day (delivery Asia), Continent to Asia at $25.5-27.5K/day (delivery in Continent ) and round-trip Transatlantic trips at $19-21K/day (delivery in Gibraltar).
On the other hand, in Asia, improved demand helped the freight market to stabilize in the middle of the week. It is worth noting that most cargoes from Indonesia were covered mainly with the smaller and older vessels in the sector. The North Pacific stood out with a large volume of cargo. Round-trip rates in Southeast Asia-Far East moved at $14.5-16.5K/day (delivery Far East).
For Supramaxes-Ultramaxes, Southeast Asia showed mixed trends as there were some cargoes from Indonesia that stimulated demand, but at the same time there was an increase in the supply of vessels. UMXs rates for trips between SE Asia and the Far East went to 14.5-16K/day. Further north, in the Far East the market recorded corrections as both the calm that prevailed in the North Pacific and the gap between shipowners' and charterers' offers led to a recession in activity. UMXs’ NOPAC round trips were priced at $14.5-16K/day, to W. C. India at $16.5-18K/day and return Atlantic Basin (BH) trips at $14.5-16K/day.
In the Middle East Gulf and West C. Indies, the market performed positively thanks to local trips paying a premium. UMXs’ Far East trips were priced at $13.5-15K/day (from Middle East Gulf (MEG) – West C. India (WCI)), short Middle East Gulf – West C. India at $15.5-17K/day and Atlantic Basin trips at $12-13.5K/day.
In the Atlantic Basin and especially the American Gulf, it moved at two speeds. On the one hand, trips to Asia were under pressure and showed marginal losses. On the other hand, Transatlantic trips moved positively. UMXs rates for Transatlantic trips reached up to $ 34.5-36K/day and to Asia at $ 30-31.5K/day. The ECSA region remained stable as demand did not show significant variations. There was a small increase in trips to Asia, however this was not reflected in rates. UMXs rates for trips to SE Asia-China moved at $ 26.5-28K/day and for Transatlantic trips (Mediterranean/Continent) at $ 25.5-27K/day.
Continent showed a lack of new cargoes which was accompanied by an increase in capacity. Nevertheless, some shipowners kept their ideas. UMXs' rates for round-local trips moved at $ 15-16.5K/day, for trips with SCRAP cargoes to the Mediterranean at $ 22-23.5K/day and to Asia at $ 21.5-23K/day. The Mediterranean showed two faces. On the one hand, the Western Mediterranean was balanced with a steady flow of cargoes, and on the other hand, the Eastern side offered several options to shipowners. Indicatively, it is reported that a UMX for a trip from the Mediterranean to Asia closed at $ 21.5-23K/day (delivery Canakkale), to the other side of the Atlantic Basin at $ 12.5-14K/day and within the Mediterranean at $ 15.5-17K/day (excluding war zones).
In the Handies market, in Continent the market increased since the balance of supply and demand was in favor of shipowners who found an opportunity to increase their numbers. The rates for the largest vessels in the category, for round trips, reached up to $ 13-14.5K/day, to the Mediterranean with scrap cargo at $ 16.5-18K/day and for Transatlantic trips at $ 11-12.5K/day.
The Mediterranean was sluggish with limited cargoes and an increasing number of open vessels. The Western Mediterranean showed a better picture than the Eastern Mediterranean with some cargoes under discussion. The rates of larger vessels (over 36K DWT) for trips within the Mediterranean were at $11-12.5K/day (delivery in Canakkale), to Continent at $10-11.5K/day (delivery in Canakkale), to the other side of the Atlantic Basin at $9-10.5K/day (delivery in Canakkale) and to Asia at $13-14.5K/day.
On the other side of the Atlantic Basin, in the American Gulf the market showed increases with a steady flow of cargoes while the list of vessels remained limited. At the beginning of the week the activity was limited but improved subsequently. Indicatively, the rates of the largest vessels in the category for trips to the other side of the Atlantic Basin ranged between $ 21.5-23K/day and to Asia at $ 16.5-18K/day.
The East Coast of South America (ECSA) region maintained its momentum despite the fact that most of the September cargoes have been covered. Now the focus is on the October cargoes. Thus, the rates of the largest vessels from the ECSA region for Transatlantic trips (Continent-Mediterranean) moved at $ 22-23.5K/day and to Asia at $ 18-19.5K/day.
In Asia and particularly in the north, the market showed signs of fatigue while the rates also fell on the majority of routes. In the south the picture is similar but Australia provided support to the market. Further west, in the Gulf of the Middle East and W. C. India there was a reduction in capacity in the middle of the week but this helped the market to balance rather than improve. The rates of the largest vessels in the category for round trips in the Far East and NOPAC closed at $ 10.5-12K / day, from SE Asia to China at $ 12.5-14K / 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