Rate improvements across the board yet to materialise

Rate improvements across the board yet to materialise
06 April 2004

After a short pause marked by the spot Cape market during the previous week, the last five trading days have recorded a deeper dive of rates. In a low volume of business Capesize rates have fallen back to the levels they had six months ago, except for long commitments (over one year) for which some deals have again broken record figures. Despite some more activity in the Atlantic, rates have failed to progress for Panamaxes as there are still a lot of ships available in the area, but the situation seemed to improve by the end of the week. Demand for large HandyMax tonnage is still firm in the East, while activity remains sluggish in the Atlantic.

On the newbuilding side there is a clear movement towards ordering larger bulkers, while the Kamsarmax design is encountering a growing success, some owners are exploring unchartered waters with the order of ultra-large ore carriers of more than 300,000dwt such as Mitsui, Cosco and Bergesen, mainly to serve the fast expanding Chinese ore import market.











The Atlantic Panamax market remained active and at slightly improved levels than last week although the market still seems to be driven more by the minerals than the grains. Having said this there were a few more grain fixtures showing their heads. The market was somewhat slower in the Pacific and rates were clearly weaker due to less enquiry and a small build up of tonnage. Congestion in Chinese ports did not help matters. Period players are still being cautious but sentiment would suggest that confidence will reign during the coming months.
The Handy/Handymax market continues on the same pace with all sizes now being affected. Activity gradually slowed down on the back of reduced grain shipments and the forthcoming Easter holidays. Even the East Med/Black Sea area which was one of the very hot spot eventually gave up. Spot tonnage is building everywhere. The fundamentals, particularly in China, have not changed. It is interesting to note that more and more shipowners are expressing strong interest in contracts which denotes a change in market perception. Also the number of period vessel looking for employment is increasing and takers are in no hurry. Transpacific round voyages for Handymax stand in the region of US$29,000 whereby Atlantic round voyages achieve close to US$31,000.

Week ending: 11/04/2004
Source: Barry Rogliano Salles Shipbrokers

Published under Cement News