Baltic Exchange: Dry Bulk Weekly Report

The market lost momentum over the course of the week, reversing an encouraging start to finish on a notably weaker footing as sentiment deteriorated across both the Pacific and Atlantic basins. Early support came from healthy miner participation in the Pacific and improving confidence in the South Brazil and West Africa to China markets, allowing rates to extend the previous week’s gains, despite higher bunker prices driven by ongoing Middle East tensions. However, this support proved short-lived. In the Pacific, although the major miners remained consistently active, fixing levels gradually eroded as owners faced increasing resistance and cargo volumes proved insufficient to absorb available tonnage. The C5 route steadily retreated from the mid-$13s to the upper $11s by week’s end. The Atlantic initially provided some offset, with stronger C3 fixtures reported in the upper $34s lifting sentiment early in the week, but this too faded as bid-offer spreads widened significantly and liquidity deteriorated. Limited bidding, growing uncertainty over forward cargoes and softer fixture levels weighed heavily on confidence, illustrated by C3 offers slipping below $33 by the end of the week. Meanwhile, the North Atlantic also edged lower amid subdued fronthaul and transatlantic activity. Having started the week at $42,641, the BCI 182 5TC peaked at $43,086 before sliding around $5,000 to finish at $37,156, illustrating a market that ended the week firmly on the defensive.

 

A rather subdued week across the board with brokers using the words flat, steady and dull in their daily reports. In the North Atlantic supply and demand were well balanced so rates were mainly unchanged with more transatlantic demand through the week than fronthaul, which tailed off as the week went on, an 82,000-dwt fixed from East Coast South America to Spain with grains at $35,000 and a few other similar vessels fixed at $25,000 from the Continent/Gibraltar for both mineral and grains round voyages. The South Atlantic remained active with consistent fixing, but again levels largely unchanged with standard 82,000-dwt vessels fixed between $20,000-$21,000 delivery Singapore for the round trip basis mid-August arrival, whilst deferred cargoes were mainly concluded on voyage basis at around $53.00/mt, an increase due to rising bunker costs. The Asian market saw slight gains as the week progressed, mainly driven by Australian minerals achieving $17,500-$18,000 for round voyages for standard types with NoPac grains adding support and seeing a slightly reduced $17,000, however it is a two tier market with only the prompt positions achieving these levels. Southeast Asian volume returned after the weather delays and helped provide another alternative for the growing tonnage availability. Period trades increased as some Owners decided to take some cover, with levels for short period around $18,250, whilst 1 year was around $17,750 for an 82,000-dwt and index-linked deals also proved more popular.

 

It wasn’t a particularly exciting week. The North American market has seen rates eroded throughout the week with both routes down over $1,000 from the highs of last week, with a 63,000-dwt reported fixed for grains delivery SW Pass to the Continent at $31,000. In the South it remained very positional with certain vessels still obtaining strong rates with a 64,000-dwt fixed at close to $30,000 for a trip via Owendo to China basis delivery Lagos. The Continent was steady in limited trading and the Mediterranean was firm in Eastern areas with a shortage of tonnage, whilst the West Mediterranean was softer in comparison. The Indian Ocean maintained similar levels with a 63,000-dwt covered from South Africa to China at $24,000 plus $240,000 gross ballast bonus. The Asian market returned small gains throughout the week with a 63,000-dwt fixed from North China to West Africa between $23,000-$24,000 and there was renewed period interest with Ultramaxes fixed at $22,500-$23,000 levels for 4 to 6 and 5 to 7 months delivery North China. Overall, the Index finished the week higher, but the gains in Asia were slightly offset by the decline in North America.

 

The Handysize market saw a broadly softer week, with sentiment remaining largely positional and limited momentum across both basins. The Continent and Mediterranean held relatively steady, with pockets of fresh demand and sentiment helping to keep rates broadly balanced. A 39,000-dwt open Gdansk 9-11 July fixed for a trip delivery North France to West Africa with grains at $14,750. By contrast, the South Atlantic and US Gulf softened as the week progressed, as limited fresh enquiry, weaker bid-offer levels and a lengthening tonnage list weighed on sentiment. A 37,000-dwt open Fortaleza 12 July fixed for a trip delivery Recalada to Chile at $27,000, while a 37,000-dwt fixed for a trip delivery SW Pass to EC Mexico at $18,500. In Asia, activity remained subdued, with oversupply and weak cargo demand keeping rates under pressure. A 28,000-dwt fixed via North Vietnam to Singapore with cement at $11,500. Period activity was also limited, with only one fixture emerging: a 28,000-dwt open Luanda 14-15 July fixed for short period at $11,500.