Too far, too fast? The fall recorded in most shipping markets (except for containerships so far) has made this week its first "victim". The now famous and successful tanker owner TOP who wanted to strike into the dry bulk segment with the purchase of 15 Nomikos bulkers from Handies to Capes in a massive $475m en bloc deal, failed to raise enough money to ink the contract. One of the reasons evoked by investors is the too fast expansion of the company but also an overvaluation of the Nomikos fleet. This second reason was obviously a major concern for potential investors as at the same time some transactions on the second-hand market revealed a bearish trend in assets values. Meanwhile, this pessimism is counterbalanced by still optimistic figures coming from China still offering, and for quite a long time, some good prospects for shipping particularly for coal.
The Atlantic Panamax market was somewhat mixed last week with some nearby positions on the front-haul obtaining rates well over the index towards the end of the week. Sentiment is that spot positions may well continue to command higher rates with forward values remaining flat with plenty of open tonnage in the coming weeks. Rates in the Pacific fell further with rates for inter-Pacific trades falling as low as US$16/17,000 per day and trips back to the Atlantic pushing sub-US$15,000. General feeling is that we are now close to the bottom and should be due for a correction in the near future.
Even if the overall Handymax index has shown a certain stability, one has to notice the sudden fall of rates out of the Continent. M1A lost 1430 points in one week only confirming the present unbalance of the market. The quite slow activity seen in the Pacific was good enough to feed the tonnage in position and keep rates stable. On the other hand, the question mark is on the trade flows coming out of South America and their ability to absorb the ships already there. Shippers are very active at the moment and taking advantages of the big supply of tonnage from almost full Atlantic but USG. As far as periods are concerned, very few have been reported except for a two-year charter of a 46,600dwt in the low 20’s.
Source: Barry Rogliano Salles, Shipbrokers, Paris