29 May-03 Jun 2005 weekly market report..Banchero Costa
Capesize (Atlantic and Pacific) This week Capesize market had again a further strong decline: the BCI index broke the 4000 level and ended at 3431 that means a further loss of 658 points that, in addition to the 558 points lost during last week are starting to worry most of owners and operators. It is remarkable that if we analyze the market indexes in the last month, we note that it has lost almost the 39% of its value: at 3rd of May the average of 4 t/c routes was exceeding the $62'000 while now it is below $35'000!! The main reason of this fall is generally due to the Chinese iron ore imports as all Chinese steel mills are deferring shipments of iron ore from Australia and Brazil after a sharp falls in domestic steel products prices. However, at same stage together with this shortage of cargoes there is also and abundance of tonnage, especially in the Far East, which is strongly contributing to this dramatic fall. Panamax (Atlantic and Pacific) On the first part of the week the market presented a brighter picture, taking advantage of grain demand in both North Pacific and South America and much more activity in Far East from the Japanese charterers. Over the week, the index gained 117 points to finish up on 3'196, while the 4 t/c average moved on a healthy $1'061 to end up at $25'140. However, with a differential between the Capesize averages narrowed to just under $10'000 there is some understandable nervousness. During the week the Atlantic stopped its upper trend and moved down in light activity, with charterers aggressively looking for lower rates. The Pacific saw a little more activity throughout the week and rates firmed up at the $20'000 level for a round voyage within the Pacific. The short period time charter is still fixed at level around $22/24'000 for prompt/spot tonnage, whilst owners of other later candidates trying to keep market up quoting ideas around $26/28'000 day. Handy (Far East/Pacific) A couple of short period fixtures for handymax tonnage were reported at still reasonable good rates. Later in the week however activity and demand for tonnage generally softened on all trades and lots of available tonnage started to pile up again. It is now likely to see some vessels ballasting to Atlantic waters in the near futures, meantime last minute rumors reported that a fancy superhandymax agreed a timecharter rate well below $15'000 day. Handy (North Europe/Mediterranean) Very few reports of concluded fixtures have come to the surface, but the Black Sea market remains firm and at the end of the week several new requirements to carry fertilizers were quoted which should just keep the trend unchanged. Demand for tonnage to load from the Continental area is still poor and rates for business loading across are not considered good enough by the owners, so they trend to run spot before deciding to cross the Atlantic in ballast. Handy (US/N. Atlantic/Lakes/S. America) There have been bit more requirements quoted out of South America and US Gulf. From this latter area we started seeing again some enquiry to load cargo direction Far East. Increased demand has not yet pushed up rates significantly enough, and smaller handies seem to still have trouble to find business from the US Gulf. Handy (Indian Ocean/South Africa) Iron ore cargoes from India to China slowly keep getting fixed, but rates are falling on a daily basis in an otherwise very quiet shipping area. Banchero Costa