A dull end to September trading saw sharp falls in both the Cape and Panamax markets, down 11% and 10% respectively, and overall the BDI dropped 7% on continued poor sentiment. Better news for smaller tonnage where continued stability is being seen, with the Supramax index practically unchanged and the SupraHandy index adding just over 1%.

Providing another positive slant: there is reportedly clear evidence of the recent capacity restarts in the steel industry. According to the World Steel Association, total global steel output rose to an 11-month high in August, and while most regions showed a decline in production, Asia recorded a gain of 10% and the Middle East 15%. There remain fears that some of these restarts are premature, however, with Arcelor Mittal predicting it could be 2012 before steel markets returned to pre-crisis levels.

According to Paris-based brokers, Barry Rogliano Salles, rates in both the east and west came under pressure in late-September, with no real signs of support. Furthermore, tonnage supply in the east is slowly building. Over the last week in the month, the BPI lost 10% to drop to 2,317 points, while the four time charter average finished at US$18,593. The north Atlantic remains quite active and there are still grain cargoes to be fixed. However without a wholesale injection of interest, the market is going to fall further with no sign of a turnaround.

For Supra/Handy tonnage the main feature of late-September trading was the return of Indian iron ore exports to China, which drove rates up to US$20,000 plus. This balanced an otherwise slow market in the Far East with rates slipping from the mid/high teens the week before to the low/mid teens.

The Atlantic remained firm particularly from the Continent and USG. Volumes of scrap shipments are still high, thanks to European governmental incentives to scrap cars. Consequently Transatlantic round voyages have been hovering around US$20,000.

The south Atlantic is less active. Grain shipments are low and sugar is largely dependent on the mood of Indian buyers. This has induced owners to lower their rates to the mid teens passing South Africa for Atlantic employment, to the low/mid twenties for PMO/India trips.

Unusually, it is interesting to note that the average daily t/c rate for supramaxes (now around US$ 21,600 per day) are converging with those of the capesize bulkers which, after its recent 70-80% drop, is standing in the mid 22,000’s per day.

In the S&P market brokers are reportedly are seeing strong interest for the handysize sector with many inspections taking place and modern vessels (mid 90’s onwards) seeing decent prices being offered, a move reflecting the relative stability in this market sector. Some recent vessel sales are reported as follows:

SHANGOR 48,910, built 2001, China, sold US$23m to Indian buyers
IMANDRA 32,755, built 1985, Poland, Sold $5.2m to undisclosed buyers
CLIPPER STERLING 20,742, built 1999, Singapore, sold US$13.1m to undisclosed buyers
SCANDA 38,000dwt, built 1990, Bulgaria, sold for US$8.5m to undisclosed buyers

Finally, China’s NASCO have bought three 57,000dwt ‘Dolphin’ vessels from Zhejiang Zhenghe in China: one for delivery ex-yard November 2009 at US$29m and two for delivery ex yard 1Q and 2Q 2010 for US$27m each.