Fearnleys Weekly Market Report - Dry Bulk October 22, 2014
Chartering - Handy
We experience a typical oversupply of ships in the Atlantic which causing rates to slide. In the USG it is just enough cargoes to keep the rates fairly flat but for the rest of the Atlantic we see rates sliding. TA’s are paying ard USA 8,700. In the Feast there are still no signs of improvement. There are hardly any cargoes out of India and lack of coal cargoes from Indonesia to China. Supramaxes open Singapore are being fixed in region of USD 10,000-11,000 for trips to India while the SE Asia rounds are paying ard USD 8,000. There is still some shorter periods being done and vessels open India are being reported fixed at ard USD 8,000-9,000 for same.
Chartering - Panamax
A steady flow of new coal orders assisted by some bad weather causing delays, generated an increasing activity in the Atlantic. Owners are holding back, upping rate level after several weeks on slow pace. Atlantic rounds in the USD 10,000 range with voyage rates substantially up as well. However, USG fronthaul is marginally up, paying arnd high 15,000 low 16,000 or abt USD 44 pmt midweek. The eastern Hemisphere is firming up even faster, with an increased number of coal shipments from Indonesia and South Africa to India further fueled by NOPAC grain rounds. Pacific business paying well in excess of USD 10,000, with many Owners holding back to move. The period market is slowly returning from silence as well, with short period done in the low/mid 9’s and one year mid 9K to 10 K. The lack of early ships and the number of increased orders is mainly the reason for the remarkable market upswing and expectations for a stronger sentiment for Q4. The bears, however, still cry; for how long will it last?
Chartering - Capesize
The turning point in the market was Thursday last week. Vale came into the market a picked up only a few vessels, strongly motivating the paper market to rise sharply. This rise was backed up this week in the physical market where rates flew up from high usd 16’s to usd 20 pmt on the important Brazil/China route. Additionally the West Australian miners followed suit and that market has risen from low usd 7’s to low usd 9’s. The weighted average time charter has risen from usd 13500 to usd 15900 and the forward paper curve is pointing upwards. It remains to see if the market will continue to push once Singapore is back at work for the balance of the week. Nonetheless this could be a start to a much wished for healthy Q4.