Still riding the roller coaster

Still riding the roller coaster
Published: 15 December 2004

After another exciting period of nearly one month where rates reached unprecedented record levels, the market has stalled during most recent trading days. Figures have started to dive from their top positions reached last week, but so far no one can see if this is just a technical correction or if we’ve reached the crest of another wave, despite activity was sometime really scarce in some areas of the market. Handies have shown the strongest resistance in this downward trend, thanks to a higher level of business in both basins. The Panamax market strongly lost ground, suffering from a lack of cargoes offered especially in the Atlantic. Despite being in a rather similar situation the Cape market didn’t plunged so deep as tonnage availability remains tighter.

 

 

 

 

 

 

 

 

In the news this week was the confirmation that the trend toward long and massive supply deals leads also to new shipping arrangements, this time with the order of two 300,000dwt (VLOC) from Cosco at Universal, to serve a 20-year iron-ore supply contract with Baosteel between Brazil and China. At around $90m apiece the newbuilding price for these ship is not far from a VLCC with a similar tonnage, which is now in the region of $110m.

Last week the Panamax market continued its downward trend. The physical as well as the paper market has experienced a sharp correction. The four time charter average index is on its way to loose US$10,000 from its highest point about two weeks ago and now stands at about US$44,000. Period activity declined sharply, and most charterers seem to have fixed their most urgent end of the year business. They now seem to be able to afford to wait for easier times, but the question is if they should wait too long before a possible rise after Christmas and New Year.

 

 

 

 

 

 

 

 

The Handy market is definitely influenced by the Christmas break. Rates are being affected by more uncovered ships positions but the underlying sentiment is still firm. Some areas remain hot like the US Gulf or the Continent. The Pacific set back from mid/high 30’s two weeks ago to low 30’s today for the larger Handymax. On the period front, Tess 45 are getting mid US$20’s for one year against high US$20’s a few weeks ago. The fairground ride is not over but reason (or caution?) might be back in people’s mind.

Source: Barry Rogliano Salles, Shipbrokers, Paris