Freight Market by ..Densay A.S.

Freight Market by ..Densay A.S.

May 15, 2002 Handy/Handymax sector The freight rates which are traditionally expected to decrease within summer continue to keep their high levels due to short vessel availability especially on the continent and the Black Sea market. Despite the fact, that scrap vessels arriving into Turkey have decreased seriously currently, the open vessel position for May is extremely limited in the continent market. The increasing number of cargoes ex-Black Sea and Turkey with destination Far East and Gulf ports are avoiding the decrease in the freight rates. Currently, it is excessively difficult to find a vessel to load within May and even found, charterers are not happy with the freight rates. The owners currently quote $18.00/18.50 pmt for 40000 mts of billets Nemrut/Taiwan whereas the same was booked at $14.50 pmt in early March. We do not expect a strong decrease in the freight market during summer. It is better if producers and traders consider existing freight rates at least for another month, particularly, when performing sales to the Far East and review their bookings in early June after the vessel positions come out. As per market information sales for July, they are booming and if this information is correct, it is better to try to book June & July positions on a “tbn” basis with trustworthy companies (really trustworthy companies) by requesting the conventional summer seasonal discount. No decrease in the freight rates was observed due to the common trend, despite the decrease in the number of cargoes ex-Black Sea with destination U.S.A. Cargoes with destination U.S.A. are not very popular among owners since their basic aim is to steam for Far East with these high freight levels. Our opinion is that a certain amount of reduction in freight rates for cargoes with U.S.A. destination can be expected as well, within the summer months. We would like to recommend to producers and traders to try and persuade buyers to accept vessel ages up to 25 years and a wider tolerance for cargo quantities. Especially, with Taiwan cargoes, 15-year age restriction is seriously limiting vessel availability. Sources from the market indicate: - 40000 mt rebar Turkey/3 ports U.S.A. Gulf, loading in May, charterers freight idea $20.00 pmt. No response yet from owners. - 40000 mt billets, Ukraine/Taiwan, charterers freight idea $19.00 pmt - 40000 mt Turkey/Taiwan, May/June, best offer $18.50 pmt - 40000 mt Turkey/2 port Taiwan, charterers offer $18.00 pmt - 35000 mt Iskenderun/China, 6000 c/cqd early May, two bookings effected at around $21.00 pmt as per information from brokers - 20000 mt rebar Turkey/Al Jubail, freight idea $20.00 pmt - 2x30000 mt product Turkey/USA 3 ports $ 20.00 pmt We would like to recommend that producers and traders book their cargoes without putting into the market in order to prevent the freight market from further rise. DENSAY Denizcilik Ve Ticaret A.Ş. Ataşehir Bulvarı 42 O Bl. K: 16 Ataşehir 81120 Istanbul / Türkiye Tel: + 90 216 455 35 95 Fax : +90 216 455 35 99 COMTEXT A45TR651 TLX : 36897 e-mail: densay@densay.com