The now approved Arcelor-Mittal merger has provoked a wave of reactions amongst steelmakers; the Chinese ones of course but also the Japanese who are now pushed towards consolidation to be able to play on the same ground as the new conglomerate, which holds 10 per cent of the world market.
Closer to the shipping markets China¹s authorities have ordered ³large ironore stockpiles at domestic ports to be reduced soon² blaming them for pushing raw material demand over the country¹s real needs.
In another sector and in contradiction with some previous alarming report on the effects of drought, the NDRC experts are forecasting an increase in China¹s grain production for this year discarding the risks of massive imports needs.
Last week has been very active for the Panamax sector but mainly on period basis. Market went up quickly as one year period deals over US$20,000 were reported. Some even said it has been overheating by quick in and out deals in the Pacific and should now come down for July. One thing interesting to notice though is that owners taking ships for period today are confident for a strong end of the year and probably a steady first half 2007.
Last week saw the upward trend confirmed resulting in a good level of activity and period fixtures for Handies. One year period for Supramax has been reported fixed at around US$22,000 while 4-6 months was seen finalised at around US$25,000. The 52,000 dwt ŒNavios Ionian¹, was reported fixed at US$27,000 for a trip dely China redely West Africa.
The HandyMax market saw 3-5 months period rates revolved around US$21,000 and 37,000dwt ŒSpringwood¹ was reported fixed for 3-5 months at US $17,000 delivery Venezuela redely Atlantic. The 22-28,000 dwt ships are being fixed at around US$15,000. Despite tonnage building up in Atlantic and Pacific, there is no reason today to believe market will cool off this week.
Source: Barry Rogliano Salles, Shipbrokers, Paris