The dry bulk shipping market is currently experiencing varied performance across its different vessel segments, with Capesize showing some resilience while Panamax, Supramax, and Handysize face downward pressure.
Capesize Market: Seeking Stability Amidst Mixed Signals
The Capesize market is seeing miners and operators looking for mid-August dates on the C5 (West Australia to Qingdao) route. However, peripheral volumes from East Australia have dipped compared to last week. For the C3 (Brazil to China) and West Africa routes, cargo inquiries are predominantly for September, with operators trying to optimize August dates and vessel sizes.
While spot tonnage in the Pacific appears fairly balanced with cargo volume, ballasting tonnage for end-August and early September dates is becoming very thin. This suggests a potential tightening of supply for later positions.
- C5 Rates: C5 is concluding at mid-high USD 9 per metric tonne (pmt) levels by mid-week.
- C3 Rates: Fixtures on C3 are concluding at high USD 22 pmt levels for end-August dates.
Despite some positive signs for later dates, the immediate market on C5 has seen a slight ease from a recent six-week high of $10.575, settling around $10.285. However, overall, the Capesize market has seen strong rebounds recently, with the Baltic Capesize Index (BCI 5TC) surging through the $30,000 threshold to $31,756 as of last Friday, indicating significant week-on-week gains.
Panamax Market: Bearish Correction
The Panamax market has experienced a notable correction this week, with prevailing bearish sentiment across both the Atlantic and Pacific basins.
- Atlantic Basin: Limited transatlantic and front-haul activity has forced owners to adjust their ideas downwards. This is attributed to cautious charterers and weaker demand from East Coast South America.
- Pacific Market: The Pacific remained sluggish. While Indonesian and East Australian cargoes offered some activity, the overall demand was insufficient to absorb the lengthy tonnage list, particularly around Indonesia. This imbalance has led to softer rates and widened bid/offer gaps.
- Owners’ Dilemma: With the Transatlantic (TA) index retreating and the P6 (Pacific round trip) continuing to weaken, owners are increasingly opting to stay in the Pacific rather than ballast (return empty) to other regions, awaiting clearer market direction.
Supramax and Handysize Segments
Both the Supramax and Handysize segments are characterized by limited fresh inquiries and soft sentiment across most regions.
- Atlantic Basin: Activity in both the North and South Atlantic was minimal, largely due to the ongoing summer holiday period. This lack of demand has led to a continued build-up in tonnage availability.
- Asia: The Asian market remained steady but sluggish. While Southeast Asia showed some interest, it lacked the momentum to significantly drive rates forward.
- Overall Outlook: Sentiment overall is flat, with few immediate signs of improvement, as there is little fresh cargo volume to push rates upwards.
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Source: Fearnleys
