All dry bulk markets recorded a strong correction, which surprised everyone. Contrary to the previous weeks the Capes have been the most affected in this global downturn. The feeling is that it is an over reaction to Chinese authorities’ declared willingness to reduce the steam of their economic engine. There was already some signs of stabilisation for Panamax tonnage by the end of the week and rumours that some charterers are playing the waiting game before coming back in the market.
The Panamax market suffered again across the board during the first part of the week but sentiment was restored during the last two trading days of the week with indices finally turning around in both basins on Friday. With holidays in Asia this week the market will surely be on hold before showing its true colours again.
As illustrated by the indexes the Handy/Handymax set back throughout the last week. Not surprisingly the Pacific went down sharply with a lack of cargoes. Iron exports from India were stricken by the double impact of less purchases from China and the monsoon. Consequently, ballasters towards South Africa and later South America have been adding to the already oversupplied plate/Brazil grains loaders. This being said, healthy levels are still seen with handymaxes able to achieve around US$28,000-30,000 for transatlantic round voyage or in excess of US$40,000 for trip Far East. The handies opposed a stronger resistance but rates on new businesses are now seriously discounted (between 9-12 per cent) from one week to the other. The period market is closed to a standstill, typical of a wait-and-see situation.
Week ending: 09/05/2004
Source: Barry Rogliano Salles Shipbrokers