10 - 17 March 2006 weekly market report..Banchero Costa

Capesize (Atlantic and Pacific) This week has been all under the negative sign: the BCI index lost a total of 602 points (about 15 percent), the average of the 4 T/C routes moved from $40,345 to $32,211, a decline of as much as $8,134 (about 20 percent). In particular it was the Far Eastern market which suffered the most, with iron ore from West Australia to China down to below $10, and the Pacific round touching $30,000. Also in Atlantic there has been very little activity, taking the transatlantic round to about $32,500. Tubarao/Rotterdam is again below $12, whilst coal ex Richards Bay for the Continent is now around $12.75 with papers in strong decline for loading May/June. Panamax (Atlantic and Pacific) After the previous week ended with some fixtures concluded at encouraging levels for long trips to the East, this week started on a softening tone and this became more evident as the week progressed, with charterers then beginning to press home their advantage. The route to the Middle East went in the low $18,000s/day and the Transatlantic round voyage dropped from the previous 16,000/day to about $15,250/15.500 day. In the Pacific, after a firm start, owners' expectations failed, with the week proceeding rather slowly. In any case, the short period was not so heavily influenced and level still remains quite healthy. The one year period still remains between 16.500 and 17.000 usd level. However, some rumors indicate that traders do not expect that the market will continue at such high levels and rates might start to cool down very soon. Handy (Far East/Pacific) A lack of spot tonnage available could not save this market from becoming a little quieter. Charterers are still showing interest to book additional tonnage for short period up to 12 months but there is less voyage demand and charterers are gathering together to create some pressure on owners by not trading their requirements until the last moment. Rates for trips into the Indian Ocean started decreasing. Handy (North Europe/Mediterranean) Additional demand for tonnage to load ex Continental ports is further firming up the market. Even if scrap remains the leading commodity carried, several vessels were booked to carry steel products into the United States. The Black Sea remains quite idle and over-flooded by available tonnage. Owners start ballasting out and looking to South American origin business, similarly to the tonnage coming open at Mediterranean ports, but this side of the market doesn't seem firm enough yet to afford it. Handy (US/N. Atlantic/Lakes/S. America) The US Gulf had a depressing start of the week with a very poor amount of fixable business. Afterwards, some reports of better paid vessels to the Continent. The week ended up with a slightly stronger atmosphere supported by new available enquiries. The market from South America remained stable enough but still affected by ballasters from other areas. Handy (Indian Ocean/South Africa) The sudden absence of the Australian iron ore supply due to ports being paralyzed by the storm affecting this country has further fired up the rates from the Indian Ocean. The $30,000 is now available through reported fixtures but the situation is described as very positional. The Chinese are trading terms for their next Australian supply contract. The monsoons expected to hit the country in about a month time may do the rest. Banchero Costa