At last, some optimism returns to the sector

At last, some optimism returns to the sector
Published: 25 August 2010

Will the Baltic Dry Index reach 5000 by year-end? One or two of the more optimistic brokers seem to be suggesting that this barrier could be broken, given the recent upsurge in rates, although clearly there is a long way to go with underlying sentiment on global fundamentals still posing  a moderate degree of uncertainty.

On a week to week basis, August activity levels pushed up the BDI appreciably although in the final week it fell back slightly to the 2700 level. The yearly average now stands at close to 2900 so there is some distance to go before most shipowners can take a more relaxed view on their trading financials.

The Panamax sector slipped back in late August despite an active Atlantic sector, particularly increased exports from the US Gulf with single trip rates up at around US$26-28,000 per day. Period contracts are tending to echo similar pricing sentiment with 12 month contacts  for Panamax tonnage also being fixed at the US$24-26,000 level , a modest increase over early-August fixings.

The Supramax sector also made some small gains throughout August with tonnage in 50-57,000dwt range recording charter rates of around US$24,500 for typical 4-6 month trading contracts and trip charters bringing in US$20-22,000, much of this activity concentrated in grain and specialist ore trades.

Activity levels for Handysize tonnage picked up in the Atlantic throughout August with more enquiries seen for short period tonnage for end August/early September - As the grain season is fast approaching, the South American and USG markets should enjoy firmer rates say brokers with one story going the rounds that Handymax tonnage has been offered upwards of US$40,000 to trade in the Indian Ocean and Far East. Conversely only minimum short period activity focused on the Atlantic basin is currently being reported, with Handymax tonnage picking up around US$20,000 per day.