Dry Bulk Market: Capesize Segment Supported by Demand in the Atlantic Region
The market ended the week on a high as the Atlantic region stepped up its activity and ignited other regions to also build in value. The Capesize 5TC now stands at $13,373. That is hardly an impressive level for this time of year – or in regards to the past 18 months – yet it has lifted +4,068 week on week. The stark difference in earnings between regions is evident as the Transpacific pays $13,518 to the Transatlantic C8 at $18,144, while the Ballaster C14 route lags at a paltry $9,080 even after several days of gains. The Pacific activity was largely stable in rates at the beginning of the week. But as the Atlantic continued to gain, the positive sentiment infected the Pacific region as a run up in West Australia to Qingdao C5 was seen by Friday. The C5 route now prices at $8.98, while the Brazil to China C3 was similarly affected and closed up at $19.006. The Capesize market is not anywhere near where Owners were expecting, or are happy with, but a rally like this is welcomed and sparks hope for a strong finish to the year.
Some described the market in Asia as a bloodbath this week with values seeing extensive corrections. The Aussie/NoPac round trips were now traded at levels not seen since Q4 2020 as demand and confidence waned in the basin. Older and smaller units by the end of the week were conceding rates of sub $7,000 in order to fix for the shorter trips, which highlighted the fall out here. The Atlantic revitalised midweek on the back of some much-needed demand in the north of the arena. Transatlantic and fronthaul trips yielded improved rates. The East Coast South America early arrival window was affected somewhat by the fall out in the Pacific and doubled down on sentiment a little here too. But a number of US Gulf to Far East deals were heard concluded midweek at $21,500, with improving rates to come some felt. Period news included an 82,000-dwt delivery Japan agreeing $15,000 for approximately 17/19 months charter.
A story of two halves during the week as positive momentum returned to the Asian arena with stronger levels of enquiry from Indonesia and later on in the week from the North Pacific. In contrast, the Atlantic overall lost ground with limited support from key areas such as the US Gulf and South America. Period activity included a 61,000-dwt open Kandla fixing one year at $12,500 for the first four months trading thereafter at 112 per cent of BSI. From the Atlantic, a 56,000-dwt open Spain was heard fixed for a trip via Morocco to India at $25,000. The US Gulf saw Supramax sizes now seeing in the low $20,000s for Transatlantic runs. From Asia, a 56,000-dwt open Singapore fixed a trip via Indonesia redelivery China at $12,000. A 63,000-dwt open Singapore fixed a trip via Indonesia redelivery Vietnam at $13,250. The Indian Ocean saw limited activity. A 58,000-dwt fixed a trip from EC India redelivery China with iron ore at $8,000.
With minimal activity across the Atlantic and Pacific this week, levels have continued to soften. The Continent and Black Sea have seen levels of enquiry reduce further. A 35,000-dwt was fixed from Rouen to West Africa at $15,750. In East Coast South America, larger sizes continued to take smaller stems and levels are softening with a 36,000-dwt rumoured to have been fixed for a trip from Recalada to Skaw-Passero Range at $23,000. In Asia, a 40,000-dwt open in Thailand was fixed for a trip via Western Australia to China at $10,500. There has been more activity from the NoPac region with a 38,000-dwt fixing from Japan via NoPac for a round voyage at $11,500 and a 33,000-dwt fixed from Astoria to Japan at $13,500. Period has been more active with a 38,000-dwt fixing basis delivery in China with December dates at 108% of the BHSI index.
Source: The Baltic Exchange