Charterers eye period market as Atlantic interest quietens

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Jamie Dale - Tuesday 16 December 2008

 

INTEREST in the Atlantic panamax market has quietened down this week, but the larger charterers are still looking seriously at the period market, despite a softening in paper values.
A London broker told Lloyd’s List that Louis Dreyfus, SwissMarine and Cargill were all looking at period charters between one to three years, while a number of Korean charterers today were looking at both short and long periods. 
However, just as interest started to gain some momentum, the forward freight agreement rates have softened. 
As such, the broker said that charterers were now presumably sitting and watching again. 
On Monday, SwissMarine fixed the 76,585 dwt, 2006-built Eternal Grace for delivery on December 24-26 at South Korea for one years’ trading at $10,800 per day. 
The Geneva-based charterer also fixed a 2006-built kamsarmax with delivery at Shanghai on December 20-25 for 11-13 months’ trading at $12,250 per day. 
Glencore joined the action today fixing the 75,776 dwt, 2005-built Baltia for spot delivery at Shanghai for one years’ trading at $11,000 per day. 
Elsewhere, the Baltic Exchange said that a 1999-built panamax bulker was either fixed or close to fixing for up to three years with delivery in the second half of January in the Mediterranean. 
“There was some talk that Louis Dreyfus was working the ship for two years at $13,000 daily with an option of a third at $17,000 daily,” the Baltic said. 
Yesterday, the panamax FFA calendar year 2009 contract was trading at $12,250 per day, while the first quarter contract was trading at $9,500, both down $1,000 from a day earlier. 
The Baltic Panamax Index has continued to post daily gains after it rose last week for the first time since November 18, buoyed by an improvement in the capesize market. 
There were even some fresh inquiries on Monday, which all added up to a more exciting start to the week than of late, ICAP Shipping said. 
“The momentum is likely to proceed for the remainder of the week as charterers aim to cover the rest of their cargos before the quieter Christmas period sets in,” ICAP Shipping said. 
The London broker said that charterers were also keen to cover their early January positions at current rate levels, while also avoiding coming back to their desk before the New Year. 
By yesterday, activity in the transatlantic had dropped off, with rates hovering around the low $3,000s, the broker said. 
With rates still too low for some bulkers to cover operating costs, owners are continuing to lay-up their vessels. 
“I presume that a lot of the older dogs are looking at scrapping or selling, which is a good thing. 
“Even if the market stayed this low for a couple of months then everything old enough will scrap and that puts us in a better position for when the market comes back. 
“Hopefully we will have cleared out all of the late 1970’s/early 1980’s built [bulkers] that are far too old and should have been scrapped a long time ago,” the broker added.