A very hot period on all dry bulk markets especially with the Panamax segment leading the race of the fastest progression of the week, fuelled by a rush on tonnage available for time charter. Similarly demand for Handy/Handymax tonnage has remained sustained in both basins with a renewed interest for period charter. So far there is no clear signal that this fever could soon decrease, considering the first rumours coming from the yearly negotiations between Australia and Japanese steel mills, talking about rises of 40% to 80% (from US$57 to 80 or even US$100/t) for their coal supply! Further to that on the thermal coal front, China is talking about at least two years of coal shortage despite their huge domestic reserves.
Needless to say that such news do not announce fair weather ahead. Another week of steady increases in the Capesize market, more timid at the beginning of the week but then between US$600-800 per day for the rest of the week, adding almost US$3,000 over the whole week at around US$88,000 average of the 4 t/c routes last Friday. When will this stop? And as per the previous weeks more ships being fixed for periods upto 3 years at very strong levels and record sales levels for a few ships being sold. The fourth quarter this year is hot as previously anticipated. The IISI just released its latest figures for steel production showing a rise in world production of 9.3% for the first ten months of 2004 compared to 2003. China is still leading the race with a 22.0% rise over the same period leaving far behind the US with 7% and the EU (25) with a respectable 5.2%.
The Panamax market is still on its way up and has almost reached last year’s all time highs. Period activity is vivid, and operators are still playing the charter in / charter out game. But this activity, at least at short and medium term, is not without foundation in the ’real world’ of physical cargoes, and all basins see tonnage in very short supply. Owners thus have no problem achieving ever higher rates. The fronthaul index is showing close to US$46,000, the Pacific round voyage has easily broken the 43k level…and this with an index that seems to lag behind the physical market for probably some days.
Still a very firm week for Handysize & Handymax markets with a BHMI that has gone over the US$30,000 level with an increase of about US$2000 over last week. Rates have significantly gone up on all routes with a particular emphasis on the Pacific Basin with the Far East round voyage reaching over the US$30,000 level. Modern units between 25,000 dwt and 30,000 dwt positioned in Far East/SE Asia getting low to mid twenties for short period, larger units for up to one year getting in the very high twenties. Mid 90ies built Handymax have been reported taken in the Atlantic for two laden legs in the low 40ies. The Continent stays firm with under 20 years old built 38,000 tonners being fixed between mid to high 20s for short period.
Source: Barry Rogliano Shipbrokers, Paris