Dry Bulk Market: Capesizes Had a Forgettable Week
The Capesize market had a forgettable week for owners as rates slipped away, closing the week below $15,000 on the 5TC. The Pacific and Backhaul trade saw some particularly sharp declines as charterers took full advantage of the weaker sentiment and build-up of tonnage. The tense situation in the Taiwan Straits has had much of the market following closely. But as yet there is very little disruption heard to shipping schedules. The Transpacific C10 closed the week up +$468 to $5841, which is approximately operating cost levels for Capesize. The Backhaul C16 dropped to -$8111, a level not seen since January. In the North Atlantic rates been softening at a slower rate. Traditionally at this time of the year this region is prone to bursts of volatility, yet current low cargo volumes are providing little incentive. Transatlantic C8 closed at $18,306. Further south from Brazil cargo flow to the Far East was heard to be relatively strong. But again charterers were able to achieve lower levels as Brazil to China C3 closed at $22.111, down -3.839 over the week. Some of the softening in voyages rates can be attributed to the lowering of fuel prices as global levels have started to relent from recent highs.
The week was a whirlwind of activity for the market with solid activity both on the Transatlantic round trips as well as Indonesia from a Pacific perspective. Things did appear to ease back as the weekend approached with rates seemingly under pressure again. However, many did describe the market as confusing. In the Atlantic an 81,000-dwt delivery passing Skaw was heard fixed midweek for a trip via US Gulf redelivery Continent at $18,500 – a good indicator on route P1A for the week. Despite limited activity the mean average for the longer Pacific rounds were pegged at around $15,500. Similarly, route P5 the Indonesia round trip, hovered just below $15,000 for index types whilst the smaller/older units discounted less for same. Period bids and offers continued to be far reaching with little concluded. However, a strong rate was agreed early part on a nice design at $22,750 delivery central China for five to seven months.
Negativity swept across the market in all sectors. There has been significant reductions in Asia, with a 58,000-dwt open in China fixing a trip to the Continent with an intended cargo of steels at $19,000 after failing for similar business earlier in the week at $22,000. A 63,000-dwt open in Hong Kong was fixed for a trip via Indonesia to China at $18,000 and a 60,000-dwt from Japan via Australia to the Arabian Gulf with an intended cargo of Grains at $19,000. In the Atlantic, a 63,000-dwt fixed from Santos to the US Gulf at $28,000. A 63,000-dwt open in Rio Grande fixed a trip to Bangladesh at $18,500 plus a ballast bonus of $850,000. A 57,000-dwt was rumoured to have been fixed from Casablanca via the Continent to West Coast Central America at $18,250. In the US Gulf a 63,000-dwt fixed from New Orleans to China at $27,000 earlier in the week.
The sector has seen further loses this week with brokers describing minimal activity in both basins, largely due to a lack of enquiry which has seen pressure remain on owners with prompt positions. In East Coast South America a 34,000-dwt was rumoured to have been placed on subjects for a trip from Necochea to North Brazil with an intended cargo of grains at $24,500. A 32,000-dwt was also rumoured to have been placed on subjects for a trip from Barcarena to Portugal at $25,000 and a 39,000-dwt was rumoured to have fixed a trip from Recalada to the Continent at high $20,000s. However, further details have yet to emerge. In Asia a 36,000-dwt open Taipei for middle of August dates was rumoured to have fixed a trip via Japan to South East Asia at around $16,000. A 34,000-dwt open in South Korea fixed a trip to South East Asia at $16,000.
Source: The Baltic Exchange