Freight market comeback later this year?
While the Cape market is climbing alone at present, it increasingly seems that everyone is preparing again for a comeback of demand but don’t know yet what impact this will have on the figures. On the shipowning front, the announcement by CSG/CSDC that they are postponing the floatation of their dry bulk business, signals that they probably wait for better times. Mining conglomerate BHP revealed the approval of port expansion at its Hay Point coal terminal, which will lift capacity by 4Mta to 44Mta. Chinese authorities announcement of new limitations to be enforced on foreign investment in the steel sector, which will in fact
be restricted to large companies, will probably not dramatically curb the current production growth.
The Panamax Pacific saw some mild improvements at the start of last week following on from the short flurry of period activity from the previous week and improved sentiment on the Cape market. However, in the absence of fresh cargo and increasing pressure from spot tonnage the increase was unsustainable thus quickly reversed. The week ended with the four T/C’s breaking the US$14,000 mark, a level some owners had predicted to be close to the bottom of this particular cycle. With little fresh cargo on the horizon coupled with the holiday factor, we anticipate further downward pressure to be exerted in the near future.
The trend was still very negative in the Atlantic and T/C rates lost about US$2,000 per day during the week with very little grain activity. Meantime the Pacific remained stable with Handymax Pacific round voyages still at about US$12,800. With the present holiday season, all the operators are now considering that there is a very limited possibility for a recovery to take place before the end of third quarter.
Source: Barry Rogliano Salles, Shipbrokers, Paris
