Dry Bulk Market Looking for a Clear Direction
According to Allied’s Research Analyst, Mr. Thomas Chasapis, “albeit being at an early stage in the game, this situation of late can have however multiple interpretations. An interesting one would be of a market aiming for its macro balance levels, whilst moving within different support-resistance levels. Another theory would be that there are many parties involved who seek stability through “meanreverting” strategies (i.e., average spot freight numbers of the past 3 or 5 years, etc.), when the uncertainty of where we stand in the economic cycle is on the rise.
I would personally point as overall causes the present fragile (volatile) macros, the mispricing of market risk, the general regulatory and technological transition period we are going through, as well as additive noise through the pluralism of different dynamics that push and pull the market across all directions”.
In a separate note this week, shipbroker Banchero Costa commented on the Capesize market by noting that it was a“negative week for Capesize indexes, which saw a new drop in numbers, erasing last week’s hope for a freight rate revival. Despite the positive sentiment recorded on Thursday and Friday, rates have been falling for nearly 6 weeks. Overall, the situation remains unchanged, with demand returning to normal levels and supply remaining strong despite severe weather in the far east, which may cause some delays. BCI closed down on Friday at $3,610, a loss of 226 points, with some improvement expected by the end of the week. The 5TC index followed the same trend, closing at $29,938/d (-1,873), returning below the 30k levels broken last week. Out of the Pacific, the standard C5 route from West Australia/China lost some ground over the previous week’s gains, closing on Friday at $12.56/mt, a loss of 0.36 points. Except for the last day of the week, when higher numbers were agreed, the market was stable for almost the entire week, with fixtures below 11 levels. Indeed, the related Transpacific Round Voyage followed the same path and closed negatively at $31,562/d (- 1,909). Out of Brazil, the situation remains unchanged, with miners supplying the year’s final requirements, primarily for the second half of December and already some for the beginning of January, but limited output appears to be continuing.
The baltic index of the C3 route from Tubarao to Qingdao fell further after last week’s improvement, closing at $26.09/mt, a 0.44 point drop. As a result, the related China-Brazil round trip time charter rate was lowered down to $24,582/d, resulting in a daily income loss of $786. Nothing new for the C17 route from Saldanha Bay to Qingdao, which is directly affected by fluctuations on its sister routes C3 and C5, confirming the momentum of ups and downs that has been going on for three weeks, bouncing between mid low 19 and mid low 20, closing this week at $19.79/mt (- 0.30 USD), erasing last week’s improvement. Despite the previous week’s relative quietness, it was a more active week in terms of trading and fixtures outside of the Atlantic region. Freight rates appear to be correctly assessed, given the large gap between bids and offers last week, but remain negative. Indeed, the C8 14 Gibraltar/Hamburg transatlantic round voyage ended negatively at $33,500/d, a total loss of 3,505 points, despite gains on Thursday and Friday. The same is true for the C9 14 Continent/Mediterranean trip China-Japan (Front Haul), which closed at $48,550/d, a $975 decrease”, the shipbroker concluded
Nikos Roussanoglou, Hellenic Shipping News Worldwide