The Capesize market is seeing renewed activity, particularly on the C5 route from West Australia. There’s been a noticeable uptick in enquiries from operators, miners, and those looking to secure vessels via tenders for mid-July dates. This suggests a stronger demand for iron ore shipments from Western Australia.
The dry bulk shipping market is currently characterized by varying sentiment across different vessel segments, with some areas showing signs of recovery while others face continued pressure from oversupply and cautious demand.
Capesize Market
The Capesize market is experiencing a slow recovery, particularly in the Pacific, after a period of marked decline and persistently low activity in early to mid-June.
- Pacific Basin: There’s an uptick in inquiries for mid-July dates from operators, miners, and for tenders on the C5 (West Australia to China) route. Some operators are also looking for August coverage, both on an index and fixed-rate basis. Peripheral volumes out of East Australia have shown improvement, but other areas of the Pacific remain quieter.
- Atlantic Basin: On the C3 (Brazil and West Africa to China) route, primary interest is for dates from July 20th onwards and the first half of August.
- Tonnage and Rates: Pacific spot tonnage is fairly well balanced, though a notable number of vessels are choosing to ballast due to weaker rates in certain areas. Ballasting tonnage is heavy for July and early August. The C5 route has shown a slow recovery this week, reaching low USD 7 per metric ton (pmt) levels by mid-week. For C3, mid to mid-high USD 18 pmt levels have been reported for late July/early August dates. Overall, the Baltic Capesize Index (BCI 5TC) had previously shed significant value, dropping from above $23,000 to settle at $18,408 by late June, before seeing a slight rebound.
Panamax Market
This week saw a subdued Panamax market with limited momentum in both basins, indicating a delicate balance that hinges on cargo replenishment.
- Atlantic Basin: Sentiment remains cautious. Uncertainty over true market levels is creating wider gaps between owners’ expectations and charterers’ bids, especially for forward cargoes originating from the Continent and North Coast South America (NCSA). Fronthaul cargoes continue to underpin some activity, but the volume of new cargo needs to be replenished to sustain current rate stability. Further south, activity has eased slightly, marked by softer bids and owners showing more flexibility. Average daily earnings for Panamax vessels were down to around $13,424 as of early July.
- Asia: The Asian market opened mixed but gradually softened. Charterers are gaining confidence, while owners are beginning to face resistance, particularly for forward dates. Australian coal exports remain a supportive factor, but activity elsewhere in the Pacific has quietened down.
Overall, the Panamax market is at a precarious balance, with a critical need for new cargo inquiries to maintain any positive momentum in the coming weeks.
Supramax Market
The Supramax market remained firm despite a slow flow of fresh inquiries, showing regional variations in sentiment.
- Atlantic: The Atlantic basin displayed a slightly more positive outlook.
- Asia: Asia had a slower start to the week for Supramax vessels.
- Indian Ocean: The Indian Ocean region remained quiet.
Handysize Market
In contrast to the Supramax, the Handysize market was generally subdued and mostly flat across all regions.
- Atlantic and South Atlantic: These regions held steady, indicating a degree of stability despite the overall market softness.
- US Gulf: The US Gulf experienced downward pressure, primarily due to an abundance of prompt tonnage and limited new cargo inquiries.
- Asia: Asia showed a modest upward trend, driven by a slight improvement in the cargo-to-tonnage ratio.
Overall, the Handysize market currently lacks significant momentum, reflecting a generally quiet period for smaller dry bulk vessels.
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Source: Fearnleys
