Friday, January 16, 2009
Fatigue" signs observed in the dry bulk market after recent rally
Friday, 16 January 2009
After a good rally during the previous – almost – couple of weeks, the Baltic Dry Index (BDI), which tracks the cost of hauling commodities like iron ore, grain and coal in ships, showed its first signs of fatigue, retreating by 12 points, ending yesterday’s session at 908 points. This development can be attributed – once again – at the capesize market, which had also led the latest rally. The capesize index shed 38 points closing at 1850 points, according to the Baltic Exhange. The panamaxes also continued posting losses, edging further down by 11 points at 502, but the surprise came from the smaller types of vessels, such as the supramaxes and the handysizes, which managed to post small gains, ending at 413 and 279 points accordingly.
According to data from the Baltic Exchange the daily average time charter for a capesize is now standing at $15,385, which is deemed enough to break even. The same can’t be said for smaller vessel types with the market “paradox” of supramaxes earning more than their larger “sisters” i.e. the panamaxes continuing. The average daily time charter for a panamax has dropped below $4000 at $3995, while the relative earnings for a supramax now stands at $4321. Similarly, a handysize can fetch an average of $4121 on a daily basis.
Nevertheless, the capesize rally of the previous days brought back some smiles in the market. Fearnley’s latest report commented that the Atlantic is tigher for tonnage and rates are increasing. “Vale continues to be the market-leader in the Brazil/China trade and rates were hovering at usd 13.50 pmt level. Clearly market-players expect better rates ahead and several Capers were fixed for 1-2 yrs tc: 165,000 dwt/97, 12 mos, at $21,000 and NB 180,000 dwt did 2 yrs at around $23,000 with 2q09 delivery” said the broker.
Things are different in the Panamax market. According to Fearnley’s Atlantic rounds are now concluded in the $4,000-5,000 range. “. In Southeast Asia 40-45,000 dwt vessels are seeing between $3500 and $4000 for trips via Indonesia redely India or China. India activity has reduced somewhat with less iron ore stems. The Navios Mercator 53,000 dwt fixed usd 5000 dely PMO via India to China (the last weeks saw rates at usd 9000 for similar delivery). The voyage rates are around $9.50 for iron ore ex India. Petcoke, grains and coal are the main driving forces in the Atlantic and a 36,000 dwt was reportedly fixed at$6500 for 2 ll within the Atlantic basis dely Santos. The USG and Continent are still affected by dull markets” said Fearnley’s.
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