The Capesize and Panamax markets faced significant sentiment-driven shifts during the week, largely influenced by rising geopolitical tensions, while the Supramax and Handysize segments remained relatively steady or mixed.
Capesize Market Overview
The Capesize market experienced a strong start to the week, primarily fueled by consistent miner activity in the Pacific. However, this early optimism faded significantly towards the end of the period.
- Pacific Basin: Maintained a solid lift due to the reliable activity from miners.
- Atlantic Basin: Struggled for momentum, facing quieter inquiry and weaker sentiment. Activity from key regions like Brazil and West Africa remained subdued, indicating limited fresh demand.
- Geopolitical Impact: Although underlying fundamentals were supportive, market confidence was clearly softened by China’s decision to impose new port fees on U.S.-linked vessels. This geopolitical tension became the dominant factor, with sentiment, rather than demand, setting the tone by the week’s close.
Panamax Market Overview
The Panamax market was characterized by a distinct disconnect between its financial and physical segments, a dynamic explicitly linked to the escalating US-China tariff situation.
- Paper vs. Physical Market: A rallying paper market (Futures Forward Agreements – FFAs) was contrasted by a subdued physical segment. This disconnect arose as bullish FFA sentiment failed to translate into significant physical activity, with charterers adopting a hesitant, wait-and-see approach globally.
- Basin Performance: In both the Pacific and Atlantic, this cautious dynamic was evident. The market found a floor in the Pacific from steady intra-regional coal and mineral demand, but the Atlantic’s positive start gave way to slow activity and a wide bid-offer spread.
- Outlook: Despite the geopolitical headwinds, underlying fundamentals remained stable, with the South Atlantic in particular showing early signs of future vessel tightness.
Supramax Market Overview
Both the Supramax and Handysize markets were less volatile, showing mixed or steady sentiment across different regions.
- Supramax: Remained relatively muted with mixed sentiment. The Atlantic had a steady but soft undertone, with the U.S. Gulf thought to have found a floor. The Pacific showed a firmer tone with improving inquiry, though fixing activity was limited.
- Handysize: Sentiment remained steady across most regions. Conditions were stable in Europe and the U.S. Gulf, the South Atlantic softened slightly due to a growing list of available tonnage, and Asia held firm as market activity gradually picked up following recent holidays.
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Source: Fearnleys
