Market Surprises

Market Surprises
14 December 2003

The dry bulk markets are back on a strong trend, after having taken a short breath during the first weeks of November. Thermal coal demand and a renewed interest in vessels taken for periods are part of the explanation of this unexpected rise. The BCI and BPI have regained some of the ground previously lost, with a rise of respectively  263 points at 6249 and 383 at 4443 points. Rates for periods are now back to their third highest level of the year, with some Panamax vessels reported above US$30,000/day for 12 months. HandyMax and Handysize tonnage have also benefited from slightly firmer conditions.








Rates for Panamax got a boost, especially in the East, with several large/modern ships fixed in the low US$40,000  for Pacific trips or NOPAC to Japan voyages, like the 75,000-dwt, 1999  built, 'Seaguardian' fixed for a tct, delivery 'Yonghong', via Australia  and redelivery in Japan at US$41,000/day. In the Atlantic, rates aren't as high, but nevertheless Atlantic r/v are approaching and sometimes even surpassing the US$30,000/day. Fronthaul rates are generally a little bit firmer, but haven't recovered their previous level yet. Older ships  are taking a slice of the cake with a 25 year-old unit fixed at US$30,000 for an Indian Ocean trip. The number of vessels fixed for periods has
 been higher, from often above US$30,000 for modern vessels for 5-7 months  t/c to the low US$20,000 for two years. On the voyage market the rise has been similar to Capes, most routes increased by some US$2/ton and for example grain stems from US Gulf to Far East are now edging toward the US$50/ton mark, while transatlantic movement went from US$25 to US$27.

There is still some pressure in the Atlantic on the HandyMax and Handysize markets. Fronthaul trips on large vessels approach levels close to US$30,000, and there is a persisting demand for logger and smaller ships ex ECSA and the US Gulf. On the period market, the rates remain firm as seen in the fixture of the 46,000dwt 'Pretty Flourish' fixed for 5-7 months, delivery Scotland at US$24,200/day. In the East, some large ships have been taken close to US$25,000, a level close to the one prevailing two weeks ago. On the fleet side, 105 ships aggregating some 4.4mdwt have been delivered since the start to the year.
Week ending: 14/12/2003
Source: Barry Rogliano Salles Shipbrokers

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