The anemic state of Capesize Pacific rates (C5) continues to impact the overall dry bulk market significantly. Following a nearly 70% collapse in just two weeks, which saw the average spot index fall below $10,000 per day, it is now hovering around $15.
Capesize Market Update
The Capesize market is seeing activity from miners, operators, and tenders primarily for late July dates on the C5 route (West Australia to China). Periphery volumes out of East Australia are holding a sustained level of enquiries, though other Pacific fronts remain relatively quiet.
On the C3 route (Brazil and West Africa), there’s a handful of enquiries for end of July dates, with most interest now shifting to August. Towards mid-week, some enquiries for forward September dates also began to emerge, indicating a longer-term booking horizon for some charterers.
Spot tonnage in the Pacific is currently abundant and well-balanced with buy-side enquiries. A significant amount of ballasting tonnage is positioned for the first half of August, with several vessels still available for end-July loadings.
Rate-wise, the C5 route concluded at low-mid USD 7 per metric tonne (pmt) levels by mid-week. On the C3 route, fixtures for 1-10 August dates were concluded at sub mid USD 18 pmt levels. For mid-August dates, bids are generally in the low USD 18 pmt range, while offers are typically in excess of USD 19 pmt, indicating a spread between owner and charterer expectations.
Panamax Market Gains Momentum
The Panamax market has experienced a significant upward momentum this week, primarily driven by a robust Atlantic basin. Strong demand from East Coast South America (ECSA) for late July and early August loadings has actively drawn in tonnage, leading to tighter vessel availability in the North Atlantic. This tightness has, in turn, resulted in firmer rates for both transatlantic and front-haul voyages.
This strength in the Atlantic has had a positive spillover effect, stimulating the previously quieter Indonesian market and contributing to a firmer tone across the Pacific. While the North Pacific remains more mixed, a healthy cargo count and tightening tonnage in the South Pacific have emboldened owners. They are now holding out for higher rates, supported by positive Freight Forward Agreement (FFA) values and an overall bullish sentiment in the market.
Supramax Market Continues Positive Trend
The positive momentum observed in the Supramax sector has continued across most regions, with the 11TC (Baltic Supramax Timecharter Average) steadily climbing.
In the Atlantic, transatlantic rates from the US Gulf remained strong, despite limited fresh fixing activity, indicating firm underlying sentiment. The South Atlantic witnessed improved rate levels amidst tight tonnage availability. The Continent and Mediterranean also noted gains, even with scarce visible activity.
Asia remained buoyant, primarily driven by steady backhaul demand and healthy cargo flows from Indonesia and Australia. Overall, the Supramax market reflects growing confidence among owners, even as the volume of reported fixtures remained relatively sparse. This suggests that underlying supply-demand dynamics are favoring owners, even if the immediate fixture count isn’t high.
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Source: Fearnleys
