The wind of optimism is no longer blowing in dry bulk shipping these days. While on one side China progressively unchains its custom control on some raw materials, the government is tightening its grip on the economy in a fear that the country may rely too much on increasingly expensive imports, "I believe the era of large-scale expansions is over, the government will strengthen its control." Xiao Chunquan, a director at the State Development and Reform Commission, said.
The Panamax market took a modest turn upwards last week, with early positions in the Pacific thinning out. This was largely sentiment driven as tonnage is still building up on the forward position and a lack of fresh orders. The Atlantic increased slightly against the background of grain activity from ECSA although with a lack of fresh orders the market could slide back this week. Short period demand especially in the Pacific increased with a few fixtures on early vessels. Owners are still asking for higher numbers although this could be short lived as again sentiment, not orders, seems to be driving the market. With a lack of fresh orders and a possible further slide in the Cape market, there is little hope of continued rise for Panamax and brokers could see last weeks increases reversed.
Another week with Handymax rates all directions showing a slight downtrend. The USG market with a limited activity did not lose so much with, for instance, a 50,000 modern tonner having been fixed at US$37,000 for trip USG to Continent. There are a lot of grain and sugar cargoes out of South America but with a lot of tonnage around, charterers have been able to maintain rates at lower level than last week, but correction at higher level is still possible. Owners willing to stay in the Atlantic to not lose this opportunity for trips to the Far East, are the ones who faced the bigger losses (around US$1,000 during the week) and rates are now in region of low 30’s for Handymax.
In the Far East, sill a lot of activity namely for coal cargoes but the additional tonnage arriving in the market pushes rates down. However, it is interesting to note some optimistic feelings with short period rates 3/5 or 4/6 months showing a real premium compared to spot t/c trips or Pacific round voyages. For instance, larger and modern units still fixing around US$23,000 for 3/5 months when t/c trips to India, for instance, or Pacific r/v, are fixed at US$20/21,000. Therefore a mixed feeling taking place with all shipping actors remembering the last year scenario with a strong drop in May/June followed by a strong recovery during summer time but, facts are there, it is still decreasing for the time being.
Source: Barry Rogliano Salles, Shipbrokers, Paris