Difficult to see where the market is going with mixed signals still the order of the day, unusual times, particularly in the heart of the winter period when things are usually a bit more obvious. In the raw material price negotiation game this week China has sent messages saying that the pressure on supply could be lower next year as they see a huge steel production surplus for 2006 and that local coal output that will be enough to satisfy the domestic demand next year.
The Panamax market in the Pacific is currently showing stronger signs than in the Atlantic. Pacific r/v now valued at US$18,000 up 16 per cent this week. Backhaul went back to US$14,000, up 18 per cent. Atlantic and Fronthaul lost around six per cent and suffered from low enquiries and sufficient tonnage in position. Transatlantic r/v is now lower and fronthaul is just over US$20,000. It is not clear whether the Pacific rally will last although today’s indices look rather positive. Period activity is quieter than last week. One year time charter is still valued at around US$17,000. A modern Panamax was fixed this week for an Australia/Far East business at US$17,500.
Over the last week we have seen a confirmation of previous trends in the Handymax market ie recovery in the Far East with a weaker Atlantic market. Atlantic round voyages for 45,000dwt are now in the region of US$18,500, Pacific rounds are in the region of mid/high 16’s while larger units are fixed at over US$18,000 mainly due to a strong activity out of India to China. On this trade the larger units can now expect low US$20’s but there is still some uncertainty on the future leading to a very limited activity with regards to period time charter.