According to an article published in Freight Investor Services, Baltic Dry Index (BDI) dropped to a two-week low from a slow Capesize market.
Drop in Capesize rates
- On Wednesday, the BDI registered a reading of 1,779, down 27 points or 1.50% on-day.
- The decline started from a typically slow Monday when shipping activities picked up slowly as some of the European trade participants were away in a Coaltrans conference in Lisbon.
- Their absence was felt in the paper market as the Capesize 5 time charter average dropped by $463 on-day to $23,740 on Wednesday.
Supply concerns over Vale
- Brazil’s Vale announced a temporary suspension over its tailings at Itabira Complex earlier this week.
- It was estimated that around 1.2 million mt of the iron ore production will be affected by the miner’s suspension, which posed a little impact on the physical market.
- However, this led to some market speculation that the miner may finish the year at the lower end of its annual sales guidance for iron ore and pellets at 307 million to 332 million tonnes.
- Due to these, the Capesize market came under pressure on Brazil to China routes, while the paper market experienced a sell-off during the week.
Support from US-China soybean purchases
- Unlike the Capesize, the Panamax paper market found more supports during the week, thanks to the positive market sentiment from the US-China soybean purchases.
- Despite the support, the Panamax time charter average still succumbed to a drop of $194 on-day, to $14,194 on Wednesday.
- Meanwhile, the smaller ships suffered a slight dip in the week, with the Supramax time charter average dropped by $85 on-day to $13,446 on Wednesday, while the Handysize time charter average fell by $56 on-day to $9,294.
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Source: FreightInvestorServices
