Handy markets slowing down but gearing up for rebound
The Capesize voyage market suffered a drop in both basins, and even if the fall was more obvious in the Pacific than in the Atlantic, now all industry players are awaiting the evolution in the coming weeks. Is just a temporary blip, or a change in trend. Some lower than expected world economic growth was mentioned also this week. However, if the situation is rather similar for Panamax, many charterers are still confident the market will rebound in the short time. The number of vessels taken for periods remain high and some oldies have succeeded in getting rates close to US$30,000, for one-year period, and investment in second-hand tonnage and newbuilding show no sign of slowdown. The HandyMax and Handysize followed the same trend as the larger tonnage of the bulk fleet. The fall in the Pacific basin has been felt. For the first time for a good time, the market has been in favour of charterers.
The Panamax market has seen rates falling on most routes. Both transatlantic and fronthaul trips have dropped substantially. Depending on the routes, rates have fallen by US$4,000 to US$7,000/day. With the exception of fronthaul trips for modern ships most rates have fallen below the US$40,000/day mark, which hadn’t been seen for weeks. Some modern ships, for fronthaul trips have been able to get rates in the region of US$43,000 such as the 2001-built, ’Marine Prosperity’ fixed delivery Antwerp via US Gulf and redelivery in the Far East at US$43,000/day. In the East, transpacific r/v rarely exceeded US$37,000/day. The only area which still benefits from healthy returns is the Middle East/Indian Ocean area, with rates above US$40,000 for short trips to the East. Some vessels have been taken for periods without any obvious fall in rates levels, such as the 1995-built ’Epiphania’ fixed for two years delivery in China, taken at US$33,750/day. A mark of confidence in the coming strength of the market. On the voyage market, grain rates from the benchmark route from the US Gulf to the Far East have fallen below the US$70/t, which was the record of the year. As far as the fleet is concerned, it is a bit early to access whether this is a change in trend, but contracting of Panamax is below what it was last year, during the first two months of the year. Is there enough tonnage to go round?
The HandyMax and Handysize market, with the exception of fronthaul trips, which still saw rates in the region of the mid US$40,000, started to slow down particularly in the East. Large ships over 50,000-dwt ships have obtained rates in the mid US$45,000 for trips to the Far East, while transatlantic r/v can be estimated to be in the region of US$38,000/day. In the East, the number of ships available free have dragged the rates down and Pacific r/v are down to the mid US$20,000/day. The general sentiment prevailing, however, is the market should rebound in the coming weeks.
Week ending: 22/02/2004
Source: Barry Rogliano Salles Shipbrokers