Despite the announcement that Chinese industrial production is feeling the first effects of the credit squeeze organised by local authorities to avoid overheating, dry bulk markets have again experienced a very nervous week gaining between 15 to 30 per cent (depending on ships’ sizes) in only five working days…
Rates are now back to the levels they were three months ago or in the autumn 2003, just before things were at fever pitch…
The "stars" of the week have definitely been Panamaxes in both basins with a surge in short period charters in the Atlantic and still a strong coal activity in the East. The Cape market remains very tight as sustained fronthaul and transatlantic business is drying up the available tonnage. With a still strong activity in the East, HandyMax tonnage list is getting shorter in the Atlantic and rates are prompt to react to any demand signals.
Panamax markets rose sharply on all routes this week but this significant rise seems to be driven more by sentiment and paper trading than demand itself. The news that China may start buying grain products again is fuelling this rise and the knock on effect is that charterers and operators have started to take in period tonnage, mainly for one or two years.
The Handy/Handymax rates went up dramatically almost everywhere on the back of strong period interests. A 42,000dwt is now targeting US$27,000 for one-year period delivery Continent.
Short period levels are also jumping since modern 50/52,000dwt are now talking low US$30,000 in the Indian Ocean/Far East on the back of strong Indian iron ore exports to China and Indonesian coal.
The fertiliser season in Brazil is boosting the Continent/Baltic Sea, which is a major supply area, and the new grain crops start moving from North France.
The situation gives lead to suggest a market upswing but illustrates also the nervousness of the market operators.
Week ending: 18/07/2004
Source: Barry Rogliano Salles Shipbrokers