Dry bulk market: Capesizes enters positive territory

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After several weeks of relatively stable price movement, the Capesize 5TC market started to show slightly positive sentiment with levels pushed to $15,299. Overall Luminaire activity has not been very eventful, but Pacific C5 West Australia route in Qingdao is up +0.773 today at $10.741 and has steadily improved over the week. Meanwhile, the cargo to ship ratio in the Atlantic would have tightened, especially for fast positions. Transatlantic C8 climbed +2250 week over week, now standing at $11,625. Further south in the Atlantic from Brazil, the C3 Brazil to China travel route is currently costing $26.04 amid slowing activity although largely disappointing. The Capesize market is definitely improving in sentiment, which is a welcome sight for many. However, with the dark shadow of the lockdown situation in Shanghai hanging over all shipping markets, Capesize’s primary destination market is unable to fire on all cylinders, capping trade somewhat at this time.

It was a limited trading week due to the Easter holidays in many regions. A gradual decline in all rates in the Atlantic this week was caused by further minimal demand with a large disparity between supply and supply spread throughout the week. Those owners forced to make repairs before the weekend have reluctantly slashed bids as charterers appear to be holding their ground. Typically, transatlantic round trips hovered around the $27,000 mark with several deals made at or around that level. Asia also had a sluggish week overall, with something of a two-tier split market. The southern region was largely under pressure, with many smaller/surplus vessels benefiting from reduced fares for coal-limited trips to Indonesia. Further north there were glimpses of support found ex NoPac as well as coal voyages ex Australia to India, highlighted by a delivery of 82,000 dwt China accepting a rate of $25,000 for a NoPac voyage and a delivery of 74,000 dwt China fixing $15,500 for a voyage via Indonesia redelivery Vietnam.

With many countries celebrating Easter, the flow of information was rather slow. However, key regions saw an increase in positive sentiment as demand returned from the US Gulf and Asia. Period cover was sought and a China Ultramax open was set for four to six months at around $34,000. In the Atlantic, the main focus was on the US Gulf, which saw an increase in inquiries. A 63,000 dwt Delivery SW Pass fixed trip to Egypt at $45,000. Elsewhere, a 55,000 dwt opened in West Africa was secured via a new delivery to South Africa in China at $28,750. Stronger demand in Asia supported rates. A fixed delivery Kosichang voyage of 61,000 dwt via Indonesia and Cambodia at $32,000. Brokers said further north there had been an increase in the level of NoPac activity. However, the meetings were kept secret. A rather flat week in the Indian Ocean, but a 56,000 dwt voyage was secured to Fujairah via the Persian Gulf and returned to Bangladesh at $38,000.

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It was a short week for many, but the BHSI made positive gains after a period of negativity. Brokers have been talking about more investigations on the east coast of South America in recent days. A 33,000 dwt set from Vitoria to the east coast of Mexico at $35,000 and a 40,000 dwt would have been placed on subjects for a voyage from Recalada to Algeria at $40,000. In the US Gulf, a 38,000 dwt was set from the US Gulf to Spain in the upper $20,000s. In Asia, a 28,000 dwt opened in northern China was reportedly placed on subjects for a voyage to Southeast Asia with an expected cargo of $21,000 steels. A 35,000 dwt opening in Southeast Asia pegged a US West Coast voyage in the $30,000 range. The period was also active with an opening of 28,000 dwt in Japan in early May setting four to six months at $25,000.
Source: Baltic Stock Exchange

Edward K. Thompson