The Capesize market experienced a week of two halves, with steady gains early on followed by a loss of momentum as sentiment turned softer.
Capesize Market
The Capesize market was characterized by a distinct division over the week, starting with steady upward movement followed by a loss of momentum as market sentiment softened.
- Rate Volatility: The BCI 5TC benchmark opened at $23,453 on Monday, peaked midweek at $24,252, and then slipped to close the week at $23,216.
- Regional Drivers: Early gains were primarily supported by firm demand in the Pacific, where active miners pushed C5 rates beyond $9.50. In contrast, the South Brazil and West Africa to China routes (C3 fixtures) struggled due to limited inquiry and softer fixture rates, indicating a lack of fresh demand.
- Geopolitical Headwinds: While underlying demand remained firm, the overall sentiment was tempered by an escalation in trade tensions. This was sparked by China’s announcement of new port fees on U.S.-linked vessels in retaliation for similar U.S. measures.
Panamax Market Performance
The Panamax market began slowly but gradually improved as confidence and activity increased across both the Atlantic and Asia basins.
- Atlantic Growth: The North Atlantic market steadily shifted in owners’ favor, supported by strong demand out of the US Gulf and US east coast for both fronthaul and trans-Atlantic business.
- South America Rally: South America saw a brief mid-week rally for vessels with end-October arrival dates. A notable fixture included an 81,000-dwt vessel achieving $17,500 for a trip via EC South America to Singapore-Japan, delivering retro Singapore.
- Asian Resurgence: Following several holidays, Asia showed increased confidence and a surge of fresh demand, particularly from NoPac (North Pacific). The rate of $16,000 was achieved multiple times for an 82,000-dwt on the NoPac run with delivery China. Australia demand remained steady, with rates improving consistently.
- Period Activity: An 82,000-dwt vessel was reported fixed for 10/12 months at a rate of $15,500 delivered SE Asia.
Ultramax/Supramax Sector Review
The Ultramax/Supramax sector experienced a generally poor week, largely due to widespread holidays in Asia which limited fresh inquiry and caused an accumulation of prompt available tonnage.
- Weakening Demand: The recent strong demand from the US Gulf came to an end, causing rates to fall. The South Atlantic also lacked momentum, with a fixture heard in the mid $15,000s plus a mid $500,000s ballast bonus for a 63,000-dwt vessel traveling from EC South America to SE Asia.
- Robust Continent: In contrast, the Continent market remained strong, primarily driven by sustained scrap demand. A 63,000-dwt vessel was fixed in the low $30,000s for a trip from the North Continent to the East Mediterranean.
- Asian Optimism: Asia started slowly, but a slight air of optimism emerged toward the close of the week. Noteworthy fixtures included a 63,000-dwt fixed for a backhaul trip from North China to West Africa at $13,000, and a 61,000-dwt vessel fixed at the mid $14,000s for a trip from Mongla via South Kalimantan to WC India.
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Source: Baltic Exchange
