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Thursday, February 19, 2009

Dry bulk set for a new rally, or not?


Thursday, 19 February 2009

The Baltic Dry Index (BDI) is once again “flirting” with the 2,000 points barrier, which it managed to overcome by the middle of the previous week, only to show signs of retreat after a healthy rally from the beginning of the year. And while this week was only the continuation of a downward trend, or pause for “rest” for many, the index is back on track, albeit at a slower pace than before. Yesterday’s session saw the BDI rising for a second straight day at 1986 points, with the capesize sector leading the “pack” by 231 points at 3587 points (Baltic Capesize Index).
At a similar pace, the average daily time charter for the capesize sector reached $36815, up by $3180. According to Fearnleys weekly report, released yesterday, sentiment in the capesize sector “has gone bull-bear-bull during the past week, mainly due to variations in Chinese steel-related activity. Atlantic remains tight on early tonnage, and a flow of fresh enquiry is pushing rate levels up. Fronthaul
rates stand at usd 26 pmt Tubarao/Qingdao and usd 58,000 for BCI´s on timecharter Cont-F.East respectively. Australian miners are busy picking prompt tonnage for their Chinese customers, paying close to usd 11 pmt Port Hedland/
Qingdao at present”. As for period units Fearnleys indicated they are again in vogue, with 180,000 dwt/built  2006 done for 12 months with March delivery at usd 35,000 and 165,000 dwt/built 1993 fixed for 12 months at usd 32,500 basis prompt delivery.
In the handysize/handymax market, Fearnleys noted that charterers believe the market will fall, while ship owners are ever optimistic for increased rates. “India has seen a dramatic drop in demand from China for iron ore and fixtures from the EC have been reported for Super types at usd 10,000 for trips to China. The demand for tonnage in the Black Sea boosted the rates which are now even at usd 26-28,000 for the voyages to the Far East. In the Continent Owners are able
to agree usd 18,000 daily for the Far East destinations” said the broker.

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