Huge import stockpiles in China, linked with less port congestion, and the first effects of credit tightening measures taken by the government have badly affected the markets this week, despite the still enthusiastic medium term prospects announced by mining companies in Australia and Brazil. Figures remain globally high but the list of Capesize vessels open in the East becomes longer and less congestion in ports does not help to ease the situation. The still awaited start of the South American grain export season, added to the Chinese soybean import ban, have driven Panamax rates deeper again, but some new business surfaced in the Atlantic by the end of the week. Handysizes, which had been less affected over the past few weeks, have this time recorded a stronger fall due to the growing number of ships available, waiting for some fresh grain business in the Atlantic.
A build-up of spot/prompt tonnage in both the Pacific and Atlantic basins and a ban on Brazilian soybean imports into China meant that the Panamax market was pushed even lower. There was however a new sign of hope at the very end of the week when the index recorded an upward movement for the first time for a while.
So far no sign of turn in the market. The Far East fell sharply with prompter Handymax struggling and sweating to get fixed. The same fury seized the handies. This being said, we can now see a bit more inquiries for period charter although no fixture materialised yet. The Atlantic remains slow save for the Med where orders are plentiful for all sizes. South American grains are still missing even though some shipments are done. The wheat crop in Europe is forecasted at good levels but it is too early to say whether this will translate into higher exports or increase of record low levels of stocks. The IFA (fertilisers conference) takes place at Morocco and will undoubtedly bring some fresh news for the coming season of fertilisers hungry countries like Brazil or India or Australia.
Week ending: 30/05/2004
Source: Barry Rogliano Salles Shipbrokers