World crude steel production topped 1.1bn tonnes for the full year 2005 and according to the first 2006 results this figure, despite a limited slow down, could reach 1.2bn tonnes by the end of the year. There is still a tremendous need for coal and iron ore to feed the steel and power industries and for them to secure their supplies which will continue to have a significant effect on world dry bulk shipping trends. Last week saw minor gains on all Capesize routes and generally the atmosphere was relatively static. The market appears to be awaiting a reason to be more positive and most seem to be hoping that an agreement on the iron ore prices will unlock more demand as sellers release more stems to the market.

The Panamax market gradually lost ground on a daily basis last week with the BPI falling a total of 78 points from a start at 2312. It was a quiet week on the whole and the fall was due to basic fundamentals of supply and demand, the pacific softened with charterers willing to stay away whilst the tonnage supply built-up. In the Atlantic, anticipation of increased grain activity from ECSA did bring a little support and the northern Atlantic was a bit more active but against the rising level of early tonnage this failed to turn the market to the upside. There were a few short period fixings but at levels reduced over those seen in recent weeks, with one grain house taking a 73,000 dwt ’97 blt vsl dely China prompt at around US$17,000 p/d. Whilst the Atlantic could find support in grain cargoes from South America - the Panamax market seems to move forward without a rudder at the moment.

Still a real distortion between a strong Pacific Handymax market with a lot of activity for coal, cement, clinker and grain (namely Handymax Australia to India) and a poor Atlantic market which barely benefited from the usual March effect out of Brazil. In this context we have noted for short period in the Far East a modern 45,000dwt grabber fixed 3/5 months at US $19,500 and a 49,000dwt fixed 5/7 months at US$20,000.

T/C trips China to India picked up at around US$23,000 for Supermax meantime on the long term there is less optimism with a 52,000 dwt fixed 1 year out of India at US$16,800. The demand is also strong for 27/28,000dwt with for instance the fixture of a 27,900dwt built 1996 reported 3/5 months (with del/redel South East Asia) at US $17000.

Alantic rates are much lower with for instance a modern 50,000dwt fixed US $15,000 for t/c trip Gib. to Far East via Brazil and a Supermax fixed in the region of US$17000 for trip US Gulf to Far East. An older vessel, 43,000 dwt - blt 85, has been reported del Recalada for a tct to the Med at US$17,500 plus 170.000 b/b which is really low considering bunker costs today.

Source: Barry Rogliano Salles, Shipbrokers, Paris