Bulk report – Week 40
The Capesize market continued its bull rally this week as we move into the tail-end quarter of the year. The Capesize 5TC managed a high of $86,953 on Thursday before closing out the week on a softer note at $83,865. Throughout the earlier part of the week the Pacific basin rose in tandem with the Atlantic on strong sentiment. But was seen to soften as the week ended leaving the Atlantic paying a significant premium. The Transatlantic C8 closed at $95,550 to the Transpacific C10 at $77,692. The Backhaul C16 lifted a shocking +16,175 over the week to close at $62,650. In this prime earning period owners are reluctant to lock in precious time performing positioning cargoes. The opportunity cost of forgoing higher paying fixtures is forcing charterers to make substantial lifts to their bids. The Fronthaul C9, on the higher end of the value spectrum, is reaching well into the six digit levels now as the route closes the week at $118,950. The Capesize market remains well supported and very active. While the market softened slightly towards the end of the week, there appears little sign that the fireworks are coming to an end.
Further pressure in the Atlantic this week with the nearby position feeling the squeeze the most. There were some heavily discounted rates agreed - especially for quick trips - as some participants lent towards buying time in the hope of a market revival in coming weeks. By contrast Asia, which was impacted by Golden Week holidays, held steady overall with limited activity - but demand from NoPac maintained flat rates mostly. The North Atlantic proved to be bereft of any significant demand, this is despite signs of some Capesize split cargoes entering the fray. A long tonnage count on the Continent persisted for most of the week applying pressure to rates. The Black sea grain market saw plentiful demand and rates here were deemed steady. However, the lack of a spark from the Americas proved to be the nemesis for owners. Healthy period activity on the week with support FFA’s saw an 82,000-dwt achieve $32,000 for 10/12 months.
With holidays in China, unsurprisingly the Asian arena lacked impetus overall. Meanwhile, in the Atlantic, demand grew during the week from the US Gulf. Period activity remained in the background, a 60,000-dwt open North China fixing minimum four months to maximum five months trading at $42,500. A 63,500-dwt open Mediterranean was failed for minimum four months Atlantic trading in the mid $40,000s. As said demand returned to the US Gulf, Ultramax sizes were seeing in the mid $40,000s for transatlantic runs. A mixed week elsewhere with limited fresh enquiry from South America, although some brokers said a little more enquiry was being seen from West Africa. From the Indian Ocean levels remained stable. A 56,000-dwt open Jebel Ali fixing a trip via Arabian Gulf to Bangladesh at $49,000. Limited Asian business, but a 61,000-dwt open Indonesia was fixed for a trip to West Coast India at $40,000. Further north, a scrubber Ultramax was fixed for an Australian round from Japan to Indonesia at $38,000.
Despite holidays in Asia, the BHSI made further gains and moved above 2000 points for the first time since September 2008. This was mainly down to large positive gains in the US Gulf, which has seen a 38,000-dwt fixing a trip from the Mississippi River to the Mediterranean with an intended cargo of grains at $35,000. This was up from last week when a similar trip was fixed at around $28,000. East Cost South America continued to soften with a 34,000-dwt fixing from Recalada to Kaliningrad with grains at $34,000. However, some felt the levels were reaching the bottom as more requirements were coming into the market. In the Eastern Mediterranean a 31,000-dwt was fixed for a trip via the Black Sea to Brazil at $37,000 and a 38,000-dwt fixed from the Black Sea to China with an intended cargo of Soda ash at $60,500. Asia was inactive but a 28,000-dwt fixed from Thailand via Indonesia to Japan at $29,000.