8 - 15 September 2006 Weekly market report..Banchero Costa

Capesize (Atlantic and Pacific) A further small increase brought index to 5,681, the new record this year. The market showed a positive trend even if not exciting for the whole week with ore from Brazil to China that achieved around $35 (T/C was closed to $87,000) despite many units are backing from Far East in ballast. The average 4 routes T/C closed Friday at $62,977, with a further increase of $7,256; Atlantic round was stable around $60,000. Even period interest was still very active with a Waigaoqiao newbuilding 175,000 dwt basis delivery China in 3rd quarter 2007 achieving $48,000 daily for 3 years. Panamax (Atlantic and Pacific) Period dominated the market: the two years rate for LMEs are about $26,000/ $27,000 daily, one year at around $31,000 daily or just over while the short period rate in the Atlantic hit $37,000 daily. The East started the moves but here the market was firmly supported with single trip business. Spot rates very firm LME panamax tonner open Japan agreed $39,500 daily for a NoPac round voyage. While rates are in the mid $30,000 daily range for a ship open south China for a trip via Australia or India to Continental / Mediterranean. The Atlantic saw very little spot market activity. Cargoes for eastbound destinations were in short supply although there was a touch more interest for US Gulf loaders and rates finally moved up here. Generally mineral rounds supported the market with rates around the low $30,000 daily range and not much more for trips to the East. Handy (Far East/Pacific) Even though rates have not given any sign of weakness the spot demand is smaller, especially to carry bulk cement which dominated the activity during the previous weeks, and a larger amount of quoted tonnage was seen. Charterers have shown additional interest for period chartering from short durations up to 2 years employment, the huge rates agreed still show how firm the market remains and they have been further supported by a few long term period fixtures reported concluded for forward positions on a worl-wide delivery basis. An increase of the handysize steel transportation to atlantic waters has further pushed up rates for the smaller tonnage. Handy (North Europe/Mediterranean) Black Sea activity is driving the area with a lot of grain requirements still to be covered and almost no tonnage available on a prompt basis. Handymaxes from the area achieving $30.000/plus time charter rates for trip to Middle East and mid $20,000's or more for one-year employment. Activity in the contient looked a bit more quiet but the few available requirements to be covered kept be pushed around with a small amount of tonnage available, the firm rates prevailing from the med had so far prevented North Europe loading charterers to consider tonnage with delivery in the west Mediterranean/Gibraltar area. Handy (USA/N.Atlantic/Lakes/S.America) There is almost no handymax tonnage available for September dates in the US Gulf and charterers with cargoes still to be booked are making desperate attempts to postpone to October positions when anyhow they are likely going to pay over the latest reported fixtures. The lack of cement cargoes bound to this area has created a huge lack of available tonnage. Time-charter rates for trips to Europe are heading towards the mid 30,000's for larger handymaxes, and all rates have generally reached the Pacific levels. South America was a bit quieter. Handy (Indian Ocean/South Africa) A reasonable amount of concluded chartering activity went on both from India and South Africa keeping rate levels similar to the previous week, a decrease of the demand for tonnage to load iron ore from India to china is allowing the charterers involved with Atlantic bound cargoes to discuss tonnage a little less crazy rates. Banchero Costa and Co Spa Mail: research@bancosta.it Web: www.bancosta.it