12 – 19 May 2006 weekly market report..Banchero Costa

Capesize (Atlantic and Pacific) It seems that the little improvement we've seen recently is already over, with the index up 49 points over the week but down 55 points over the last 3 days, and with the 4 T/C routes actually down $543 in the week. Activity has always been quite scarce, with some cargoes ex-Brazil to China reported very differently depending on the position of the vessel. In the Far East we saw a cape fix at $27,000 for a round via Australia and a few fixtures ex-West Australia to China reported down below $9.00. Stable short period for modern 175,000 dwt being paid 30/33,000 for 3/5 or 4/6 months, except for the fixing of the Mineral Antwerpen fixed for two years, relet for one and then sublet for 4/6. Panamax (Atlantic and Pacific) The Atlantic market remained steady during the week, even though the Baltic index declined by a few points. South America was still active but not very busy as it was in the past. Trips to the East are in the $19,000s with some prompt vessels able to achieve slightly better results. The value for a trans-Atlantic round voyage is in the region of $18,000 with about a $1,000 premium for Orinoco trading. Short period activity was rather limited as charterers were able to cover their requirements on single trip basis. An increase of cargoes from the US Gulf might give to the market a further push up. The Pacific market is almost stable, although the Baltic Index went down. There is a concrete turn over of the cargoes in the market which contributes to keep levels at healthy levels. The Indonesian market is indeed pushing the market with an increased number of new cargoes quoted. The West Coast India market seems to have been relatively calm, influenced by the heavy rain season which imposed Chinese receivers to consider alternative loadings from the Eastern Coast of India. Handy (Far East/Pacific) The local operators have been pushing around rumors about less volume of bulk cement export from China and predicted as well a reduction with the steel trade which would influence the market to a downwards trend. If these predictions are correct, they still have to materialize as charterers still needed pay high timecharter rates to move cement into the US Gulf. The majority of owners keep refusing this biz as single employment which kept short period time charter deals quite alive. Charterers also keep showing firm interest for upto 12 months employment and some fixtures were concluded at quite decent money. Rates for business back to the Indian Ocean have softened a bit. Handy (North Europe/Mediterranean) Tonnage was fixed at better levels for business loading out of the Continent, although the surface of available business from this area is not looking yet large enough. Mediterranean and Black Sea business is still going sideways but with other Atlantic areas firming up, sooner or later there will have to be some upwards reflection on rates, otherwise owners will end up achieving better money by ballasting out or fixing for period. Handy (US/N. Atlantic/Lakes/S. America) Atlantic Americas were featured by a further growth of the demand which keeps slowly influencing the rates upwards. The increase in the demand was larger from South America while owners of tonnage open in the US Gulf are strongly resisting to charterers' rates. Fewer fixtures were reported concluded from this area and next week's reports may show fresh business concluded at higher money. Handy (Indian Ocean/South Africa) The iron ore India/China fixing has rapidly switched to loading out of the Eastern coast. A portion of the fixed tonnage is however coming in ballast from Muscat or the western part of this ocean which makes the actual rate much lower. South Africa remains small in demand. Banchero Costa and Co Spa Mail: research@bancosta.it Web: www.bancosta.it