“Different companies, different minds, different moods” seems to be the weeks’ characteristic. Within all sectors of the bulk market, companies seem to be looking in different directions, triggering different sentiments. Steel producers are looking very carefully into 2006 prospects, notably from a Japanese point of view. First quarter Japanese profits have in general been disappointing and the outlook for 2006 is not being considered rosy. Their Chinese counterparts are more optimistic, contemplating a production increase. Mining companies are equally more optimistic, still riding the wave of huge demands for iron ore from China, a sentiment that is shared by some shipping companies, according to their recently published financial results. Some other vessel operators did not write their first quarter results with black ink, compared to last year.

From a commodity point of view there are new prospects emerging: copper is currently in the centre of attention, with production reaching unprecedented heights. But here too, every silver lining has its cloud: production capacity is still very much  short of demand and analysts expect this situation to last until well into 2010.

One way down for all routes selected by the Baltic Exchange is what the Panamax market experienced last week. Easter holidays  (also different depending on the country) are certainly not the only  explanation for this slowdown. It seems that demand has decreased especially  in the Pacific for iron ore cargoes and, on the other hand, the Atlantic has suffered from an oversupply, especially as the US Gulf area was so quiet.

The sudden heat of the bunker market is not really sustaining the market either but it has increased the sentiment of more prudence and less anticipation. The general trend looks negative though with charterers and operators playing the spot despite having a real view on a possible short term strategy.

The Handymax continues along the previous trends, with the Pacific overriding the Atlantic by between US$6000 to US$8000. Iron ore and coal stems are available throughout the Pacific / Indian ocean and so far one cannot see when/if the steam is due to run out. Depending on sizes, owners are holding and fixing in the low/mid 20’s for round and local voyages. Back hauls are not in favour and charterers have not much choice but to take tonnage on period to limit their exposure. In contrast, the situation in the Atlantic is generally poor. US Gulf is still overloaded with in-bound cement carriers. Steel exports from the Black Sea are low, and sugar stems from Brazil are also low. The long expected grain season from South America is starting but with a weaker impact than anticipated. As usual there are a few brighter spots (like Handies in the continent) but it seems insufficient to improve the general sentiment.

Source: Barry Rogliano Salles, Shipbrokers, Paris