July freight market report and expectations..by Densay A.S.
Baltic handymax index: 7632 points by June 7, 2002 Baltic handymax index: 7546 points by July 5, 2002 Drop of 1-month period: 86 points - 1.10% We can see that all our predictions mentioned on our previous reports are realized. Positive developments in the iron and steel business and especially the excess amount of export cargoes out of Black Sea and Turkey coupled with the increasing scrap demand prevent a sharp drop in freight rates even though there is an upsurge in ship supply. This situation is confirmed by the decrease of the freight index being limited to only 1% in the last one month despite the summer months. We preserve our general opinion of the last report as the iron and steel business is in such a powerful period a sharp fall in freight market shouldn't be expected. Regional freight market analysis of iron and steel business Shipment of scrap/ finished/ semi-finished products ex Black Sea and Turkey to Far East Even though there is a blatant increase in ship supply, owing to the high amount exported, a drop in freight prices wasn't observed. We believe that although there might be a slight fall in freight rates by end July/ beginning August, as from September freight prices will penetrate to an upward trend. We recommend to manufacturers, for sales in or after September, not to put off booking their cargoes with reliable ship owners at the current freight price levels. According to our sources: A trader booked 45.000mt billet Chinese origin İskenderun + Trieste/Mawan cargo at a freight rate of $20/mt. A trader gave a 45.000mt Diliskelesi/Mawan cargo to a Korean operator at a rate of $17/mt. A manufacturer ships its material of 40.000mt Marmara/2 Thailand with a Turkish flag ship at a rate of $19/mt. Indicative freight rates of 45.000dwt and over ships with destination Far East ex Black Sea are at around $12.000. Scrap shipment freight market of Continent/ Turkish ports Forecasts stated in our previous reports had been actualized for this region. The short supply of scrap at Black sea headed our producers working with full capacity directly towards European scrap and the global scrap demand helped to keep freight prices at a high level in this region. By today, there are eight scrap cargoes ex Europe to various destinations in the market. Latest booking reports: A producer paid a freight rate of $12/mt for a Europe/Nemrut cargo with 52 stowage. A producer paid $9/mt for a UK/Nemrut cargo with 47 stowage. A producer is in the market for his cargo of Rotterdam/Hereke with 50 stowage at a freight rate of $11/mt. 3/5000 mt Mediterranean coaster or river type freight market: The Mediterranean coaster and river type vessel market is firm due to pretty strong iron and steel market added up to the availability of other type of goods ex Black Sea. We'd better bear I mind that vessels of this market show a seriously upward trend traditionally especially during autumn.