Some gains noted with markets firming

As expected, last week saw the Capesize market continuing to rise in both basins. In spite of uncertainty concerning the price evolution of raw materials, production targets are expected to be met. Simultaneously, increasing bunker costs made charterers more cautious and for many long haul routes bunkers which represented 10 per cent of total costs a year ago are now up to 27 per cent today. Nevertheless, the Cape market should maintain the same trend this week.

In the midst of an increasing interest for short term period charters, a clear rebound was witnessed last week on the Panamax market. However, it is unclear how long the party will last. The 76 per cent increase for Richards Bay/Rotterdam seems a bit unrealistic or at least seasonal as it is mainly explained by an early winter stock-up in Northern Europe, pushing the Atlantic up while there are more vessels positioned in the Pacific. The question clearly remains whether the bottom has been reached or we are looking at a short term rebound nurtured by positive sentiments. However, the week has not started the usual way with yesterday’s widespread holidays leading to virtually no trading. The current market is owner-driven with charterers trying to keep the rates low.

The Handy market took a U-turn and firmed up in all markets. Trips East were particularly affected with rates improving to nearly US$20,000 for Tess 45. South Atlantic came to a standstill with quite a few ballasters holding up their rates and charterers not moving. The Far East showed more activity and August positions are being quickly covered, although rates are still slow to improve. India is improving slightly with more iron ore exports. Tess 52 types are getting US$16/17,000. There was renewed interest for short period and one can clearly feel a more optimistic mood among ship owners.