Markets drift downwards in July’s seasonal lull

Published 31 July 2011

A generally downward trend in rates for much of July throughout all sizes with the Bulk Dry Index being particularly affected by rate declines in the larger Capesize units  – reportedly due to a general lack of cargo availability on the main routes.

The increasing availability of Panamax tonnage in the Atlantic basin has been a feature of late-July with a number of ballasters arriving from the Pacific hopeful of picking up cargoes but in reality pushing down rate expectations, while at the same time stabilising rates in the Pacific. The Panamax short period market has been a bit more active of late, with reports of owners picking up around the US$12,000/day mark for 4/6 month charters.

The Supramax market has remained fairly active in late-July, although the Baltic Supramax Index has generally trended downwards through the month. Typical recent rates – but on thin levels of trading volumes – include US$9000 on India/China routes, north Pacific trades at US$10,000, and trans-Atlantic round voyages at around the US$10,500 level. Reports of a fixture from Europe to the Far East at US$20,000 per day, provides food for thought in these rather lethargic times.

The Handysize market also remained pretty weak, with the Baltic Handysize Index down at just 676 points. Trans-Atlantic round voyages are now said to be worth US$11,000 per day in contrast to the Pacific RV which is currently trading at close to US$8500 daily. As an indicator of period trends, a recently built 57,000dwt fixed for 4-6 months was reportedly fixed for US$11,000/day, redelivery worldwide.

On the sale and purchase front, estimated values for Supramax/Handymax tonnage on a new-prompt resale basis suggest US$33m, whereas a five-year old unit is noted at US$30m and a 10-year old vessel might command as much as US$22m depending upon overall condition and survey status.

Sources: BRS Shipbrokers, Paris and WeberSeas, Pireaus