BDI INDEX

A positive turnaround in bigger sizes supported the BDI rate last week against slower activity from the geared sizes sectors. Indeed, Q2 kicked off with gains for the Capesize and Panamax segments across all routes with Chinese demand for iron ore and grains underpinning their earnings respectively. On the Kamsarmax front, we have witnessed a strong volume of materialized period deals last week, fixing in line with FFas rates at the range of $18,000/day for one year period redelivery. The Capesize sector outlook looks more promising with summer rates closing the week at the region of the $23k/day mark amidst optimism for the rebounding Chinese mineral demand. Smaller sizes activity was subdued with the Handysize sector suffering most of the pressure amidst weakening demand in Asia and uninspiring activity across the Atlantic.

The BDI closed today (14/4/2023) at 1435 points was down by 125 points. BCI closed on Friday at 1850 points was down by 191 points decreased with 9.4% w-o-w. BPI closed at 1702 points was down by 149 points decreased with 8.0% w-o-w . BSI was decreased 65 points and closed at 1096 points with decreasing 5.6% w-o-w. BHSI was decreased by 15 points and closed at 628 points with decreasing 2.3%.

SECOND HAND MARKET

In the dry bulk sector, the volume of transactions was lower week-on-week, with Supramaxes being the main preference for buyers. The average age of vessels sold was 13 years, a year older than the 12 month average.

Typical Transaction

DEMOLITION MARKET

The demolition market remained subdued last week with a small number of scrapping transactions materializing. This is a result of continued strong freight rates across all segments and the Ramadan period when activity is slower. In India, the long-awaited upturn in the local steel market has yet to materialise, resulting in a lack of new tonnage and a further decline in prices. The steel market is soft and well-stocked inventories may push the market further down. In Pakistan, ongoing foreign exchange problems are disrupting the supply chain and forcing steel mills to halt production. The central bank hiked interest rates to 21%, putting further pressure on the currency, which hit a low of 288 against the USD. On the IMF front, Saudi Arabia has assured the Fund that it will support Pakistan with $2bn to help close the financing deal. As these problems persist, the country remains out of the market. In Bangladesh, the lack of tonnage is also a reality. With Ramadan underway, mills are not operating at full capacity and prices may fall further once the festivities are over. The interest rate ceiling of 9% will be lifted in July, meaning that banks can set it higher, putting further pressure on the local currency. In Turkey, the steel market is weak, and prices are falling. Vessel availability is low to non-existent and prices are therefore softer. Average prices in the different markets this week for tankers ranged between 340-600/ldt and those for dry bulk units between $330-590/ldt.

Typical Transaction

NEW BUILDING MARKET

The past week was rather slow since many parts of the world were celebrating the Catholic Easter with only three contracts coming to light. The French giant CMA-CGM ordered a total of six 15,000 TEU containers which will be methanol dual-fuelled. The price and the delivery remain undisclosed. On the bulker sector, J. Lauritzen ordered two 81,200dwt Bulk Carriers which will be methanol dual-fuelled. The vessels were ordered at Tsuneishi Shipyard and will be delivered in 2026, while the price remained undisclosed. On the Tanker front, the Chinese owner EGPN has ordered four firm plus four optional 18,500dwt chemical tankers. The vessels will be delivered in 2025 and 2026 and they costed $30m each.

NB Price Index                                                               Unit M USD

Typical Order

CHARTERING MARKET

SUPRAMAX: The effect of the Easter holidays kept markets at low activities. Main loading areas in the Atlantic basin such as USG and ECSA are well balanced with sufficient cargo flow to maintain healthy levels. Tess 58 fixed USD 17,500 pd basis delivery in Santos, Brazil, for a trip to Italy. Another Supra 56’ dwt fixed delivery ECSA for trips with grains at USD 15,000 pd + 450,000 GBB to China. TA from USG to Cont/Med reported fixing at USD 17,000 pd, and trips to Singapore-Japan paying just a bit more premium. The Supras in the Black Sea market were remarkably quiet due to a lack of fresh cargo and supply of prompt tonnage. Trips to Asia fell to USD 15,000 pd and trips to USG/ECSA at very low USD 10,000 pd. The Far East market still lacks optimism, and rates remain negative. Backhaul cargoes to the Atlantic pay around USD 10,000 pd, and coal trips to China around low USD 10,000 pd for Pacific RV.

PANAMAX: After a strong rebound last week, we started with a slow opening after long Easter holidays as both the charterers and the owners trying to gauge market next direction. The cargo volume has been slow to surface, but tonnage count is still tight in North Atlantic, giving a balanced feel to the market. Further south has also been quieter, and with softer FFA, the charterers are holding back or rating less vs owners' last done. Seems toppy market with adjustment on routes this week.

CAPESIZE: It’s been an uneventful week with holidays occupying most of the trading days. However, as it often does, market soften a bit before the holidays as activity slowed down. The downwards trend continued the first trading day as a cyclone towards west Australia halted miners’ program. That we currently see a change in sentiment and except the spot dates from west Australia to China, the other basins and especially south Atlantic is looking very healthy, and we do expect better levels the week to come.

One Year T/C (USD/DAY)

Typical Deal