FEARNLEYS DRY BULK MARKET REPORT

Capesize Market keep dropping further and unfortunately there is not many signs of possible improvements in near future. The fronthaul rate for Brazil/China is now down to very low USD 8 pmt. The Aussie miners and the operators have been active this week on the west Australia to China route, however the freight rates kept dropping and is down to very low USD 4 pmt level. FFA market for next year keep sliding and is now at such a level where 1-year period barely will cover the operating cost of a vessel. Hence, there is not many owners who are willing to fix out their tonnage for period, and period activity is therefore very limited. So the period deals which is being concluded is mainly concluded on index linked rate. Panamax Despite fair activity, there is no immediate sign of any recovery in any corner of the Panamax market. Rounds in the Atlantic are only paying in the 3-4k range - less on voyage. USG fronthaul still under pressure, and giving owners around poor 8.5-9k from Skaw/Gib range. "Fixed and failed" is a common expression these days. In the Eastern hemisphere rates are still sliding. Nopac and Aussie rounds at 4k + 140 APS, Indo rounds closer to 3k. Period activity reduced to a minimum. However, as some owners now are willing to sell off the next 4-7 months, some short period fixtures has been concluded on nice LME in the mid 5k’s. The forward curve for next year is not moving much around weak 5750/day. Handy The Handy and Supra market suffered further decrease in rates this week. The falling bunker and commodity prices puts pressure on the whole logistics chain and rates continue to soften. There are some positiveness on expectations for the upcoming grain season in Aussie, but this is yet to be materialized. Short Pac rounds are now paying around USD 4k. In the Atlantic, we see the same tendency with less cargo out of the better paying USG market which now facing low/mid 7k for trip Cont. The period market is not very active either, we see a big gap between bid/ask. Takers there at low 5k for short period while owners holding out for the 6k and might consider a discounted first period for the bigger Supras.