Bulk markets are booming

Bulk markets are booming
Published: 30 April 2007

It’s heating up! The growing interest for all parties to partake in the ever booming bulk market is reflected in all sorts of manners. With strong demand and persisting congestion in Australian coal ports, markets continue their upward trend: after the Panamaxes and Capes, it is now the turn for the Handies to jump on the bandwagon and march forward.

In the meantime, ship values also reached new stratospheres, with new-building resale contracts soaring up to US$110m a piece for a 177,000 dwt Capesize bulker, and at the same time a second-hand deal done for US$60m for an almost ten year-old 150,000 dwt vessel. The attraction amongst players to be involved in the market is being emphasized weekly by new entrants in the market, once again most notably in the Capesize sector. New orders for ships keep on rolling in daily, and there are no signs for the ordering frenzy to calm down any time soon. 

Panamax rates have unexpectedly kept on going up last week, BPI finishing at 5393 points (+216). With number of ves-sels open both in Atlantic and Pacific ba-sins, one could have seen a soft weaken-ing but fresh requirements for short period have balanced the market, which is firming increasingly, leading the BPI 4TCs average to finish the week at 44196 US$ per day. The Atlantic basin continued to increase with rates for the TA round now in the mid-high 40’s. Short period with dely Atlantic for LME traded in the mid 40’s. In the Pacific, freight levels in-Dry Bulk Carriers Orderbook creased by almost 2,000 US$/day to reach over US$45,000 and Panamax activity was sustained by more and more period demand. LME vessels traded for 2 years in the 32,000 US$/day region and interest for period is expected to persist for the week ahead given the current period activity.  

Supramax-Handysize This week saw a perfect correlation between the weather in Paris (very hot for the season) and the market, namely in Atlantic. Supramaxes were fixed at about US$52,000 daily for trip USG/Cont at be-ginning of the week, and obtained about US$55,000 daily at the end. For the same route the Handies (28,000 dwt) went from the US$32,000 daily level to reach  the US$37/38,000 level .Old units of 37/3,900 dwt are now fixed over US$30,000 for At-lantic r/v or short period when modern Supramaxes obtain close to US$40,000 for short period delivery Med or Continent. In feast the period market is still very active and modern 52/55,000 toners are fixed over US$35,000 for 1 year and around US$32,000 for 2 years. Modern 27/28,000 dwt are fixed US$26/27,000 daily for short period but there is a very limited activity for longer period. 

Source: Barry Rogliano Salles, Shipbrokers, Paris