While European steelmakers are, one after another, sending warnings about their financial results for the year 2005, the Chinese steel and coal sectors are on the edge of a global restructuring movement, which follows the unprecedented growth these industries recorded over the past three years. Of course the European steel industry suffers from a lower demand in its historical markets, but it also now has to face a stronger competition on overseas business. On a more positive note the largest South African iron ore exporters Assmang and Kumba Resources announced major expansion plans.
The Panamax market was looking generally depressed across the board but with bigger falls in the Atlantic basin due to a build up of spot tonnage. The Pacific remained weak although showing some signs of bottoming out. Period levels have shown significant declines on both short and longer term values and now some charterers are starting to consider whether it is time to buy back in.
After a short recovery at the beginning of the week, market started again a declining trend in all areas for Handymax, when Handies showed more resistance. In the Pacific, for instance, a new building over 53,000dwt fitted with grabs, has been fixed close to US$26,000 for short period 3/5 months ex-yard China, when modern 28,000 dwt still obtaining around US$17/18,000 depending on their position in the Far East for short period. In the Atlantic we have seen a serious decrease this week with a lot of vessels spot in Brazil and West Africa. For instance, rates for sugar cargoes ex Brazil have lost about 20 per cent compared to fixtures of beginning May.
Source: Barry Rogliano Salles, Shipbrokers, Paris.