Good start to the year

Good start to the year
13 January 2004

We had to wait the turn of the year, to see the BCI breaking the 5,000 point mark, but it finally did. After a break of almost two weeks, the current one started with some hesitation but rapidly, both the Capesize, Panamax and HandyMax and Handysize market moved on an upward trend. All sizes and routes have been affected by the rapid rise of the market but a great number of fixtures have been concluded and in the Panamax sector period rates have reached news highs.
The BCI, now at 7,349, has shown no sign of slow down. Voyage rates in both basins and for all commodities rose sharply.









The Panamax market has been particularly active with new records reached for periods, transatlantic r/v and fronthaul trips. On the period front, for example, several modern ships have been fixed for 12 months at rates close to US$40,000, when the market can be estimated to be in the region of US$36,000/day. A 20-year-old ship achieved US$29,000 for a similar period. Shorter periods have reached even higher levels, such as the 1999-built 'Carol' fixed for 5/7-month trading at US$42,500, delivery in Japan. Fronthaul rates really boosted as seen in the fixture of the 1999-built 'Great Prosperity' fixed at US$45,000 for a tct, delivery in Port Talbot via Canada and redelivery in the East at US$45,000/day. Short voyages from the Indian Ocean to China, continued to attract great interest, with several vessels, fixed at US$50,000 or above. In the East, rates have probably not been so strong, but remain at high levels. Many modern ships have been fixed for Pacific r/v at about US$40-42,000. On the voyage market transatlantic rates for grain shipments moved up sharply, close to US$32.00, against US$26.00 before Christmas, and on the benchmark route from the US Gulf to Japan, several fixtures have been done at about US$55.00, which obviously is a new record.

After the Christmas lull, the Atlantic market particularly showed some signs of an exceptional strength. Fronthaul rates for large vessels are close to US$30,000, even 20-year-old 38,000 tonners have often been fixed in the region of US$23,000 for Atlantic r/v. All ships sizes are in demand in ECSA and from the US Gulf, showing a shortage of tonnage. With the exception of the Indian Ocean and the Middle East Gulf, which remains very firm, the situation isn't as buoyant in the East for the opposite reason. Tonnage availability is high, and the number of inquiries a bit too short. Under these circumstances Pacific r/v are just below US$25,000 for large modern ships, a slight decline when compared to the pre-Christmas period.

114 ships have been reportedly delivered in 2003, but the figures are still expected to vary a bit due to some delay occurring in certain yards.

Source: Barry Rogliano Salles Shipbrokers

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