Freight market looks to China - again

Freight market looks to China - again
28 July 2005

The dry bulk markets were really waiting for good news for quite some time now and the disconnection between the Yuan and the dollar decided last week, despite its limited scope, is definitely a good one. Almost all influent players in the market reacted with applause to a decision which will lighten the energy and raw material bill of China and at the same time will not affect much the export competitiveness of their products as the country still has wide productivity margins to gain. This decision is also in line with the consolidation process of all the basic industries and the government’s efforts to avoid an overheating of the economy.









The Panamax rates continued to fall across the board but with emphasis on the Atlantic where rates seem to be in free-fall. A lot of spot tonnage open in all basins and very little new business emerging and the market seems to be taking on that summer feeling so very little chance that we will see any turn around in the short term. There does however seem to be some underlying strength or resistance on the forwards with many owners asking premium over spot for Q4/Q1 positions, which provides some positive sentiment for the medium term.










All period activity has basically come to a halt as owners are not willing to discount for the time being as feel reaching the bottom of the market. The next 3/6 months looks like it will be a bumpy ride.…

BHMI lost more the 1,400 points last week and there are no signs of real upturn for the coming days. After the Pacific free fall of the last weeks, it is now the Atlantic basin suffering badly. The spread between the two trading areas is becoming narrower as the Pacific r/v looks more stable now and the premium paid to go to the Far East from the Atlantic is now getting cheaper. Few short periods fixtures has been seen except reasonable deal above US$15,000 for a Handymax in the Pacific. A Handysize fixture has been reported also for 2/5 months at US$12,000 + US$100,000 redelivery premium.
Source: Barry Rogliano Salles, Shipbrokers, Paris

Published under Cement News