A second consecutive week of sharp corrections for the dry bulk market, although some of the softness could be attributed to Chinese holidays at the start of the week. The Capes fell by the largest margin, losing 26% on the BCI, but there were losses in all sizes. Going forward, period rates in the Panamax market were holding up but there seemed less optimism in the Cape market where the few short period deals concluded were at much softer rates.
In the coal market there was some concern Chinese demand could ease in the third quarter as the government attempts to cool the economy. However there was more evidence this week of long-haul imports which will boost tonne miles for the shipping industry. India has reported more coal imports from Colombia, which is now offering a delivered cost of about US$92/t, compared to US$110/t from South Africa. India is expected to report another jump in coal imports this year, after doubling its demand in 2009.
Unlike last week, the biggest fall registered in the market this week was in the Far East. On average the 4TC lost US$3000, closing the week at US$24,000 per day, but the Nopac route lost over US$5000 week-on-week falling from US$25,000 to less than US$20,000 per day on Friday. On the other side, the Atlantic market managed to stay ‘relatively’ steady with a majority of Panamaxes fixed at around US$27,000/day for a TA rv, down from the US$28-29,000 the previous week. The ECSA remained active and attracted a good number of ballasters, even if the Far East/ECSA/Far East route did ease by US$2-3000 for a normal Tess 74, which fixed at around US$25,000 delivery India, and just below US$20,000 delivery north China. There was little period activity in the Atlantic and Tess 74 delivery north China were fixed for short period at around US$22-23,000/day , down from US$27,000.
Handies and Supras are retreating in good order. But it seems to be more psychology than anything else since overall the market has become very quiet. The Pacific in particular seems to be in disarray with plenty of tonnage open there. There are few alternatives but to ballast over to more benevolent waters. Nopac round voyages are now hovering around US$18,500 for index types The Atlantic is also easing, particularly in the south which is still under the pressure due to ballasters from India. The Mediterranean is not seeing much activity either and ships are ballasting towards the USG or Continent where a few scrap stems are keeping that part of the world lively. Rates for Atlantic round voyage are currently yielding around US$22-23,000, which is down from more than US$30,000 some 10/15 days ago.
News source: Barry Rogliano, Shipbrokers, Paris