After several weeks of a steady fall, rates seem to be on their way up again for all sizes. Capes were prompt to react especially in the Pacific and the number of ships open remains limited. The Panamax market is burgeoning on two branches, with an intense coal activity driven by the Japanese in the Pacific area and the attraction of the South American grain season now ready to start. Despite a more intense fixing activity, following the same path as larger sizes, Handymax rates are slower to take off due to a longer list of ships available in the Atlantic.
In the news, there are growing fears of a global shortage of raw materials due to the Indo-Asian economies vacuum effect. Japanese, Taiwanese and Korean utilities are competing to be served by Chinese coal miners who have restricted their export quotas for this year, which will again lead to some price increases. China plans to invest massively in Brazilian ports to ensure its iron ore supply, and Chinese aluminium producer are forced to limit their output due to a lack of alumina supply! So no one see the dry bulk markets to soften drastically before some time.
The Panamax market was disrupted somewhat by the Easter holidays but things generally seem to be looking up. The Atlantic remained steady, still with the hope that the grain would become more active in the near future and fronthaul time-charter rates remained steady at the firm levels of around US$52,000/day. The Pacific market saw more activity from the Japanese with an emphasis on coal imports and short period. Having said this, activity was not strong enough to influence backhaul rates which remained fairly weak but sentiment leads us to believe that this will not last. Richards Bay was slow due to holidays in South Africa. The period market is still taking a breather but this could change very
quickly if the spot market turns itself around.
The Handy/Handymax continued its course downward but it won’t be long before it gets influenced by the Cape and Panamax performances. Already to the number of enquiries out of South America (not only for grains) for May is improving. Handymax fetch around US$30,000 ex West Africa for trip to the Continent. The US Gulf lags behind as well as the Indian Ocean where ballasters towards South Africa are in search of the milestone cargo.The Pacific seems a bit more active with coal cargoes out of Indonesia putting some pressure on the spot.
Week ending: 25/04/2004
Source: Barry Rogliano Salles Shipbrokers
