Dry bulk rates lose some upward momentum

Dry bulk rates lose some upward momentum
15 June 2009

Despite a weekly loss on all the dry bulk indices, brokers say there is no evidence yet of a full-scale correction, and with talk of some extended 2-3 year period deals optimism still prevails. Much of the recent talk in the markets has centred around the BHP/Rio Tinto’s plans to combine their iron ore operations, with the Chinese, European and the Japan Iron & Steel Associations voicing some concerns over the likely market over-dominance although the Australian anti-trust authorities could well over-rule and green-light the deal to form a new company which will focus on shared infrastructure, reduced costs and stable output levels of about 350Mt per annum.

The Panamax sector has tended to fall in mid-June and in average terms the Panamax market posted a drop of US$3,937 in recent days but on weak fixing volumes. Brokers now report signs of some tonnage shortages in the Atlantic basin, which may well act as a stimulus on both the spot and period sectors. Two-year periods are reportedly becoming rather popular with charterers fixing at US$ 20,000 daily or above.
Likewise, the Handy market continued its slow slide mid-June as tonnage outnumbered orders in most basins. That being said, the fall was not as brutal as it could have been, and was dampened by news of some resurgence in the higher tonnage sectors which acted as a brake on any sizeable downward rate corrections.

For Supramaxes, French brokers Barry Rogliano reports that a Black Sea to Far East trip dropped about US$2000/ day, to end in the low US$30,000s. The Continent, which had resisted the most up until now, also saw its rates decline and a trip back to the USG lost about US$1000/day to end in the low to mid teens. In the Pacific, the
situation was more stable, and the PARV lost about US$500/day to end in the low teens. Supramax vessels equipped with grab cranes open east coast India are reportedly fixing at just under US$20,000/day for trips to China with signs of some further improvements ahead.

In terms of Handysize business, brokers saw the same trend with the  Atlantic basin losing between US$500-1000 to finish at about US$10,000/day The PARV lost about US$500/day and ended in the very low teens. Short period enquiry has also rare, and rates were close to stable.

Port news indicates a growing backlog of tonnage awaiting discharge in Angola with the port of Luanda particularly hard hit – some 40 vessels currently at anchor – including several cement shipments, mainly from China but with some Mediterranean cement deliveries also being held up due to lack of berthing space.
Published under Cement News