Dry bulk markets remain high

Published 20 January 2004

Despite the forthcoming Chinese New Year this week, which will probably have an impact on the overall activity, the dry bulk markets continue their steady rise, and especially, the Cape sector recorded new highs with some modern vessels fixed above the US$100,000/day mark for fronthaul trips. Among the factors which contribute to the rise of rates, one mustn't forget the brisk rise of bunker prices, which have increased by $25/t, basis delivery Rotterdam, within five days. A good number of ships have been taken for periods, up to three to five years at almost steady levels. We have noticed a certain number of Capesize stems split into two Panamax ones. Rates for Panamax remained at high levels, with some fronthaul trips approaching the high US$40,000/day. Nothing really new on the Handymax and Handysize markets, from the Continent, the situation still offers high returns, while in the Pacific, there was no significant alteration.
With an 805-point increase at 8154, nobody knows when the rise of the BCI will take a pause.
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In the Panamax market, the situation is a bit confused. The rise in all areas continued to be obvious, while there were some signs of hesitation in the last two days of the week. Both the spot and period markets recorded new highs, as seen in the fixture of the 2002-built 'Pearl of Jebel Ali' fixed for a t/c, basis delivery US Gulf and redelivery Singapore-Japan range at US$46,500/day, plus a ballast bonus. On the period market, several modern ships were fixed for 12 months at similar rates. Rates for 12 months have obviously broken the US$40,000/day mark for modern vessels, while over 20-years old ship are in a position to get US$31,000/day. In the Pacific, freight rates are very close to the ones seen in the Atlantic, that is to say above US$40,000/day. Rates on the voyage market, have just recorded a slight gain, and grain shipments from the US Gulf to Japan are now close to US$60.00/t. Without any surprise, the activity in the Middle East Gulf/Indian Ocean still offers very firm prospects, and modern  
ships can be fixed close to US$50,000 for trips to China for example. The number of new tonnage contracted last year doesn't seem to slowdown. Since the start of the year, new orders have been placed, with 2006 delivery dates.

With a 1200-point rise of the BHMI, the HandyMax and Handysize markets have remained on an extremely firm note, especially in the Atlantic where all sizes are in very strong demand. On the period market a 50,000-dwt ship has been fixed at US$32,500/day, a rate close to the Panamax one for a similar period not long ago. Fronthaul rates from the Continent or the Black Sea have broken the US$30,000/day mark, and even smaller/older ships have succeeded in getting rates in the region of US$28,000/day for trips from the US Gulf to the Far East. In the East, the market has remained steady with 45,000dwt grabs-fitted tonnage still fixed in the region of the mid US$20,000 for Pacific r/v. So far, the Indian Ocean area remains incredibly firm, and owners having tonnage in the area can enjoy for months now a very brisk situation.