20 - 26 May 2006 weekly market report..Banchero Costa

Capesize (Atlantic and Pacific) Another week of constant softening, with scarce activity in all markets: The BCI index lost further 217 points and the 4 T/C routes lost $2,350 closing at $27,787. In particular we have seen a decline in the imports and charter rates of iron ore to China: rates Brazil/China are down from about $23/23.30 to $21.75 and also those from West Australia are sharply down below $9.00 to close at about $8.37. The Atlantic has not fared a much better. The T/a round is down from about $30,000 to $28,000 and ore ex-Tubarao to Rotterdam is getting close to $11.00. Panamax (Atlantic and Pacific) The Atlantic market still remained steady during the week. Large, modern, economical types (LME) managed to obtain levels around $20,000 plus equivalent ballast bonus for trip from Atlantic to the East. Transatlantic is evaluated in the region of $18,000 for same type of unit. In the Pacific, the week was still very active with a considerable turn over of orders and vessel available which kept the numbers at healthy levels. The inter-pacific trade is now consolidated at levels around $17,500/18,000. Same number is also achievable for short period of about 3/5 or 4/6 months. The back haul trip is paid between $16,000 and $17,500 depending on vessel's type and position. Handy (Far East/Pacific) The day to day developments so far keep contradicting the prospects of a weakening market. Short period business keeps leading the activity with handymaxes now getting fixed in the very high teens for up to 6 months duration and a fancy super-max reported fixed at same level for one year trading. The volume of single voyage requirements appears smaller but rates haven't been suffering any downward trend so far, there is even less demand from the North Pacific but the tonnage coming open in the area can still command big money as tonnage open in the east is too busy with local business to consider business involving the ballast across. Handy (North Europe/Mediterranean) Charterers keep under-evaluating tonnage coming open in the Mediterranean–Black Sea areas where fresh chartering demand remains very poor, a modern 45,000 tons was rumored to achieve around $16,000 for 3/5 months trading basis delivery Black Sea. Activity and concluded business from the Continent was very quiet also influenced by the ascension holiday on Thursday. Handy (US/N. Atlantic/Lakes/S. America) Reported fixtures out of the US Gulf are somehow contradictory with a smaller handymax achieving for short period much better money than a similar sized unit for a trip to the Far East. There are still few chartering operators chasing tonnage in this area for short period employment, which should only bring benefit to rates. The South American market firmly held to previous week's levels. Handy (Indian Ocean/South Africa) The chartering interest for iron ore to China this week was smaller also out of the east coast of India but Korean based charts booked from there a handymax for short period at quite decent money. South Africa is quiet again. The sole reported fixture is not as bad as this vessel besides being over-aged is quite heavy in consumption. Banchero Costa and Co Spa Mail: research@bancosta.it Web: www.bancosta.it