Thomas Chasapis Research Analyst

How cohesively has the dry bulk sector responded to the new market regime? It seems like a vague question at a first glance. There are many different ways you can interpret and analyze different indicators and market concepts, while you also have to take into account that one may hold different assumptions as to whether the market is in a recovery mode or just going through a periodical peak of a specific cycle. All these assumptions leave for drastically different base levels from which to measure any market potential, sustainability, and risk factors at play. Therefore, it still leaves the question as to how sustainable are the dry bulk market conditions that we have experienced in the year so far? Through the use of a triple exponential average (TRIX) index for both 1-year period TC and 5-year asset price levels, while having included in the analysis only the Panamax, Supramax and Handysize size segments, we can see the market’s downward resistance in terms of overall trend and momentum in respect to the aforementioned (more) macroeconomic indicators. At this point, we excluded the Capesize market, given its general volatile nature and the level of its relatively disconnected trend over the past year or so with the rest of the dry bulk sector. Despite the prolonged period (all of 2021), in which, the market remained in a theoretical “overbought” condition, many would have anticipated a heftier negative push in the trend (that would mean additional bearish crossover signals and steeper movements as well), in line also with the typical seasonal pressure at the early part of the year. For asset prices, based on recent historical trends, this came as little surprise, given that prices can remain on an upward momentum (especially after a boom period in rates), even when the spot market suggests otherwise. That, though, does not minimize its positive effect on overall stability and positive sentiment.

The above indications presented in the graph do not reflect any given bullish anticipation, especially when considering the current state of global markets and general uncertainty levels. The scope here is to highlight the seemingly solid state of key metrics moving forward. Notwithstanding this, we have to point out the recent flattening of the above curves (albeit still holding in bullish territory). Maybe, the answer lies in a periodical ceiling that is about to be noted in the market. Given, however, the perplexing feelings surrounding the global macroeconomic trajectory, can the market also appear to be stagnant, lacking robust direction for the near term?
Nikos Roussanoglou, Hellenic Shipping News Worldwide