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Have dry cargo shipping rates reached a floor? Report Feb 3

By • Feb 3rd, 2012 • Category: Dry Cargo

The Coracle Online Dry Cargo podcast for week ending Feb 3, 2012 in association with The Baltic Exchange

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Thank you for downloading the dry cargo market report from Coracle Online and the Baltic Exchange for February 3rd 2012. This report looks at the Capesize and Panamax, Supra and Handymax markets.

Starting with the big ships and rates looked to have reached a floor. BHP Billiton made an entrance to the market as the week drew to a close and fixed a 20th February position from Port Hedland to China at $7.30 and was said to still be in the market for more ships. Iron ore traders noted increased buying interest and the Chinese are expected to start restocking next week. A step up in short period interest sparked some optimism with slightly improved rates on the table. A 160,000-tonner was said to be on subjects for 5 to 7 months at $12,000 daily. There was limited activity from Brazil with the Tubarao/Qingdao rate hovering around $19. Transatlantic activity was negligible with a couple of cargoes fixed from Bolivar to Rotterdam at $9.50.

Turning attention to the Panamax sector and rates dropped sharply in most areas during the week. Business was largely done on an APS basis with a bonus, but on Friday we saw more activity D.O.P., with a 76,000-tonner fixed from Zhoushan for Newcastle/China run at $6,000 daily, although there were suggestions that it was actually $5,000 a day. The back haul rate went into negative territory this week on the BPI, but as yet there has been little reported actually fixed. A positive signal did come from charterers when they stepped up demand for ships to load East Coast South America cargoes. Ships from the East serviced this market. This in turn could eventually have a positive impact on the Atlantic as ships turn south, rather than head to the US Gulf.

Looking at the Supramax and Handysize markets and for some time now the north Atlantic markets haven’t been much of a refuge for supra ballasters from the East. Reports have now emerged of a 2011 built 55,500 dwt vessel ballasting from New York to the US Gulf , waiting for 10th February laydays and fixing a trip to the Dominican Republic at about $6,000 daily or possibly a shade less. From the European side, the markets have just gone from bad to worse and some owners are now talking about parking their tonnage unless there is an improvement soon in their returns. How bad are returns? Well, a 2002 built 51,000 tonner has been reportedly been fixed for delivery South Spain for a trip to the US Atlantic at zero hire… That’s how bad..

As temperatures plummet in Europe, with many countries entrapped by winter’s frozen embrace, the freight market is also enduring shivers as rates continue to fall for the smaller ships. A modern 28,000 tonner in the US Gulf fixed a short run in the Caribbean at $8,000 daily, and a 30,000-dwt ship open in the UK allegedly went around $10,500 for a scrap trip to the east Med. The handysizes also continue to struggle in the East, although there is a suggestion that levels may have stabilised.

Thanks for listening