Capesize Market Quietens Down
The market was predictably quiet by the end of the week with many traders absent for the beginning of Chinese New Year. The Capesize 5TC registered a token drop of eight to settle at $10,304 as minimal trading was heard. It’s said to be a different story on the derivatives market where rumblings of an upturn in sentiment was heard from several sources. The smaller bulk vessel classes are running counter to the Capesize decline. So much so it was heard Panamax cargoes this week were being combined to be loaded on a Capesize. The market had a fairly constant downward slide in values over the past week and yet the trans-Atlantic C8, which ended at $15,010 still trades at a significant premium to the trans-Pacific at $6,227. This highlights the more precarious trading situation in the Atlantic as tonnage remains tight, yet fixtures continue to tick over. This is not the usual for the Capesize market at this time of the year, which might have some traders questioning their position for the coming months. The West Australia to China ore route C5 settled the week at $5.827 while the Brazil to China C3 closed the week at $14.906.
It was an energetic week with EC South America claiming the headlines for the first half of the week due to increased demand from the grain houses for March arrivals. Index type tonnage fixing at around $16,750 was achieved several times basis delivery Singapore via EC South America redelivery Singapore-Japan. At the same time, good demand continued in north Atlantic in the background against a shortage of tonnage. Some fixtures for Baltic trading, which includes breaching INL, were rumoured to have concluded at astonishing rates which have yet to be confirmed. For trips to the Far East, an 82000-dwt delivery Gibraltar achieved $33,000 via US Gulf redelivery China. In large parts of Asia, it was a shortened week. But sentiment remained firm with all three major loading origins showing healthy demand. This was aided by strong support from the Americas and a robust period time charter market. An 82,000-dwt vessel delivery Japan fixed $14,000 for a round trip via Australia, whilst an 81,000-dwt delivery North China agreed $14,250 for one years time charter.
Despite the Chinese New Year celebrations taking place at the end of the week, the market remained in a positive trajectory with the BSI closing at 1,217. Period activity continued, with a 58,000-dwt open Indian Ocean fixing four to six months at $16,000 whilst from the Atlantic a 63,000-dwt open in the US Gulf was fixed for three to five months trading at $21,000. Rates for single trips from the Atlantic remained firm – especially from the US Gulf – with an Ultramax fixing at $32,000 for a trip from US Gulf to Spain. The Continent was stable, a 61,000-dwt fixing a scrap run to the Mediterranean at $18,000. From Asia, despite the impending holidays there was still demand and a 58,000-dwt open Fangcheng was heard to have fixed two to three laden legs at $11,000. Rates from the Indian Ocean were still strong as a 63,000-dwt fixed delivery south east Africa for a trip to China in the upper $15,000s plus a ballast bonus in the high $500,000s.
Another strong week with improved levels on all the routes. For vessels open in Continent-Med range there was not much difference in rates going to US Gulf and east coast South America. Whilst in South America, brokers saw north Brazil delivery paying a premium over south Brazil delivery with the market continuing to be firm. Currently the US Gulf HS4 had the highest value among all routes and showed no signs of slowing down. A 37,000-dwt open in Houston in mid February was fixed for a trip to Cristobal at $17,500. A 38,000-dwt open in east coast Central America was fixed into the Black Sea at $19,500 and a 30,000-dwt open north coast South America was fixed for a trip to Indonesia over $20,000. In the east, the celebration of lunar New Year kicked off early in the middle of the week in various countries. There was limited activity reported but the relevant Pacific routes still showed positive movement. A 35,000-dwt was booked for four to six months at $10,250 with delivery in Guangzhou and worldwide redelivery.
Source: The Baltic Briefing