Capesize

17950

Sep-17
0.00 0.00%

Panamax

11175

Sep-17
225.00 2.05%

Iron Ore

76.5

Sep-17
0.85 1.12%

Sing 380

278.25

Oct-17

Coking Coal

208

Sep-17
0.00 0.00%

Nola Urea

212.5

Sep-17
0.00 0.00%

Capesize market hammered by weak fundamentals


hammer

Capesize market took a hammering throughout the week as the lack of cargoes and tonnage oversupply problem persisted. The under-pressure Capesize market pulled the Baltic Dry Index (BDI) to a five-month low at 1,139 points, down 25 points day-on-day at Thursday, 18 Jan 2018.

The low shipping demand coincided with the low steel demand from China, due to relatively lesser construction activities and ongoing environmental emission controls enforcement in the country. Many steel mills were required to halve their output, dampening the demand for seaborne for iron ore and coking coals, imports that affected the Capesize rates.

With physical market in turmoil, the paper market did not fare better as well and stumble to a free fall.

“Another negative day for the larger units on Wednesday as the physical continues its downward momentum,” said a FIS FFA shipbroker.

He noted that the overall market is under pressure and this was once again reflected in the paper market with the front end of the curve again marked lower. For instance, the Q3 and Q4 contracts continue to be very resilient with offers being few and far between suggesting that this prompt weakness will hopefully be short-lived.

Whether short-lived or not, the little volume changing hands on Thursday certainly did not support the market optimism and saw the Capesize 5 time charter average tumbled down $863 day-on-day to rate of $12,312.

Panamax paper did not have easy week either, with range bound days trading of Feb and Mar at highs of $11,250 and $12,650 respectively on Thursday. But the highs soon came under pressure towards the closes with sellers unwilling to commit to the day’s highs.

“We saw a bit of a stand-off on Thursday afternoon with levels flat to the opening session and the overall tone cautious,” commented a FIS Panamax shipbroker.

Therefore, the Panamax time charter average fail to break the $10,600 resistance level but dropped $48 day-on-day to $10,517 at 18 Jan 2018.

Supramax was in a total different league compared to the larger vessels and made significant gains throughout the week. The Supramax Time Charter average registered $10,475 on Thursday, making a gain of $95 since Monday’s rate of $10,380.

“Supramax paper opened on Thursday, once again on a stronger note with Feb and March trading,” said an Asia-based FIS Supramax shipbroker.

As such, Feb contracts were trading at the $10,100 -$10,300 range and the Feb + March package traded at $10,600- $10,700, while the Cal 18 was seen going through $11,000. Handysize paper market then has a quiet week with time charter average dipped by $16 day-on-day to $8,459 on Thursday.

Overall, the embattled Capesize market left the trade participants pondered whether the rates have hit rock bottom in views of the weak fundamentals. Steel and iron ore prices did seem to inch up later in the week but the late charge failed to rally the depressed dry bulk market on the whole.