While charterers are now firmly back on the Cape market especially in the East with a higher number of fixtures reported and rates at least stabilised, Panamaxes and Handies are navigating into troubled waters. The grain market for Panamax units is deeply affected by the Chinese ban on soybean imports from Brazil and no settlement of the situation has surfaced yet, but the Atlantic market remains busy with iron ore cargoes which allow rates to stabilize. Despite some dispersed grain fixtures in the Med/Atlantic area no clear signal has emerged on the Handysize/HandyMax market and rates are still losing ground.
A reversal at the end of the week on the back of Transpacific picking up the lost momentum due to weather conditions/flooding.
The Panamax market continued its downward spiral with even less activity on the grain front than before and the fact that the Chinese have put a ban on soybean imports has dampened all hopes for this sector of the market recovering in the immediate future. The Pacific market recorded harder falls than elsewhere which was mainly due to the continued build up of open tonnage which is a result of easing congestion coupled with no increase in demand. Period rates also lower with the 12 month market standing in the very low 20s and not much hope of fixing anything longer than this unless at a serious discount.
The trend is still bearish with limited volume in all places and a lot of vessels being fixed on the spot. For instance, Trip USG/Continent and Pacific round voyages for Handymax have lost again about US$2,000 this week and now many owners or operators are ready to cover the summer period with short period rates at about US$18,000 for 45,000dwt. Rates for smaller handies who had been resisting in comparison to larger units have also started to strongly decrease and we have more and more logical differentials between Handies and Handymax as well as Panamax. Owners being reluctant to go to the East, the decrease of rates Continent or the Black Sea to Far East is weaker with rates are still over US$30,000.
Week ending: 06/06/2004
Source: Barry Rogliano Salles Shipbrokers