The dry bulk market has been witnessing a series of ups and downs in recent times, with Capesize vessels being at the forefront. Though the market has shown signs of improvement, the pace of recovery has been slow. This article aims to examine the current scenario of the dry bulk market, focusing on the Capesize market and the reasons behind its slow-paced improvement. The article will also look at the impact of global events, trade dynamics and other factors affecting the dry bulk industry.
The shipping industry is characterized by various market segments with different sizes and capacities of vessels. The market segments determine the rates for the transportation of goods, and the rates fluctuate depending on the demand and the available supply of vessels. The Baltic Exchange is a platform that provides daily rates for various shipping segments. Here is an overview of the rates for different segments for the week ending on March 05, 2021.
Capesize
The Capesize market segment had a tumultuous week with an initial surge lifting its time charter average to $2,401 on Tuesday, but it failed to maintain the momentum. The Atlantic basin cooled off in the middle week with limited cargoes, which weighed down the market. The market started to recover towards the end of the week, though, and the fronthaul run eventually slipped beneath $30,000 by Friday. In the Pacific market segment, the backhaul run’s performance was positive, coming close to entering positive territory but remained at -$333. The west Australia to Qingdao run climbed above $9, but soon declined back to the mid/high $8s. The coal from east Australia to China was active, and some customers paid $20,000 for a round trip at some point.
Panamax
The Panamax market segment had a mixed week that started positively but ended on a tepid note. Fronthaul trips from the Americas had solid levels of support, with the end of the March arrival window ex EC South America being the exception to the rule, with rates under pressure. Fronthaul rates via NC South America hovered around the $22/23,000 level depending on the respective ship’s specs and delivery. Asia returned a similar story with the coal runs ex Indonesia supported early in the week, with several deals concluded around the $17,000 mark for the 75,000 dwt types. Rates eased back towards the weekend as longer trips were lacking, and Australia’s coal runs into India were the only trip supported. There was plenty of period activity during the week, with one-year agreements for one 82,000-dwt delivery China at $18,750.
Ultramax/Supramax
The Supramax market segment had an upbeat week, with the S10TC average gaining 922 to settle at 14,502. The Atlantic market was quiet at the start, but it picked up as the week progressed. The gains were modest, with the market described as “positional.” More cargoes came into the market towards the end of the week, which lent some confidence to shipowners. There is healthy demand from the South Atlantic, with the tonnage list getting shorter. A 64,000-dwt vessel reported for a USG fronthaul at $20,000pd, and a Supramax fixed for Brazil to Turkey with grains at $22,000pd.
The Pacific market segment was busy from the start, with a healthy coal demand from Indonesia and backhaul cargoes driving the market. This, combined with rising NoPac and Australian round voyage rates, saw sentiment improve as the week progressed. Owners were unwilling to discount given the stable cargo levels. A 56,000-dwt reported for an Indonesia to China voyage was fixed at $20,000 delivery Singapore. A 63,000-dwt open Indonesia for a trip to China was at similar levels, while an Ultramax fixed ex-yard for a Nopac round voyage at $17,000pd.
Handysize
The Handysize market segment continued with its positive performance as the US Gulf was active with a 40,000-dwt fixing from SW Pass to Morocco, with an intended cargo of grains at $15,000. Meanwhile, a 38,000-dwt was rumored to have fixed from Mexico through Florida to the UK in the region of $12,000. In East Coast South America, a 37,000-dwt fixed from Santos to Morocco at $16,000, and a 37,000-dwt fixed from Recalada to West Coast South America at $22,000. In the Mediterranean, a 40,000-dwt fixed passing Canakkale via the Black Sea to the US Gulf with an intended cargo of cement at $16,000. The period was also active, with a 40,000-dwt fixing ex-yard in Japan for 11 to 14 Months with mid-April dates at $16,000. A 38,000-dwt open Continent was rumored to have fixed for three to five months with Atlantic redelivery at $13,500. A 36,000-dwt open in Algeria was fixed for four to six months at $15,000 with worldwide redelivery.
In summary, the shipping industry had a mixed week, with different market segments performing differently. The Capesize and Panamax market segments had a tough period as the market cooled off in the Atlantic and limited cargoes. The Supramax market segment had a positive performance due to healthy demand from the South Atlantic, with the tonnage list getting shorter. Finally, the Handysize market segment had a continued positive trend, with active trading in the US Gulf and East Coast South America.
