In a market that lacks direction, the news coming from China is also playing on shipping players’ nerves. First the lobbying body of local steel makers, the CISA, announced that 48 producers "plan to cut their production by 5 percent in the fourth quarter in a bid to avoid the further falling of steel prices", which means that the rebuilding of iron ore inventories could be weaker than expected. Then on the grain front, the Chinese 05/06 wheat crop will be better than expected and will reduce import needs by around 3Mt according to the latest report issued this week by the International Grains Council. However the overall trade forecast for the 05/06 grain season has been maintained as wheat exports from the Black Sea to Europe, Middle East and West Africa are expected to rise and US is expected to increase maize export sales.
The week has been quiet, but all Panamax routes have gone up. The Pacific r/v gained almost US$2000 while the backhaul gained close to US$1000. Owners are still interested in 1-2 year T/C, which are not yet attracting many charterers at these levels, which are currently in the low US$20,000. A 10 year old Panamax was reported fixed at US$21,000 for 4-6 months. Standard Panamax was reported fixed for Richards Bay Coal Terminal/Cont at US$15 per ton.
The Handymax market kept on going in the same direction. The Pacific slowed down further when the Atlantic firmed up, particularly on the continent. Handies in the Far East remained fixed in the low/mid teens for Pacific r/v. Ships open in India continue to weigh on South East Asia. By contrast, fertilisers and scrap cargoes are taking their toll on the Continent and charterers are facing difficulties in fixing at their levels. Grain and sugar cargoes out of ECSA absorb the available tonnage but we are nearing the end of the season.
Source: Barry Roglaino Salles, Shipbrokers, Paris