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Another week of low Capesize rates and no signs of improvement

By • Aug 17th, 2012 • Category: Dry Cargo

The Coracle Online Dry Cargo podcast for week ending Aug 17, 2012 in association with The Baltic Exchange

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Thanks for downloading the dry cargo market report from Coracle Online and the Baltic Exchange for August 17th 2012. This report looks at the Capesize and Panamax, Supra and Handymax markets.

We start with the Capes and it has been another week of low rates with no signs of any positive change in the market. Owners faced with low rates were also fighting charterers’ attempts to introduce punitive clauses into charter parties. Activity from the major shippers in Australia was spasmodic, but Rio Tinto shaved further cents off the rate from Dampier to Qingdao with a ship fixed for a cargo 3 September onwards at $6.60. Period rates were at bargain levels with a 170,000-dwt 2008-built ship open in Taiwan fixing at under $9,000 daily for 3 to 5 months, although this is a rate significantly above the spot market. Trading in the Atlantic once again remained thin although with the Colombian strike over for now, this could stimulate some activity.

Now the Panamax sector and the Atlantic market appeared to have found a floor with owners resisting fixing at the last done. As the the week closes a stand-off is evident. There were some fresh Baltic cargoes to go to the Persian Gulf and the East and with owners with north Atlantic tonnage reluctant to venture east, charterers may have to pay a premium.  Owners would still rather fix quick transatlantic business than commit for 2 to 3 laden legs. Several charterers were in the market and as a result have upped their ideas to encourage owners to look at the longer duration and talked rates in the low $8,000 daily range – considerably above current spot rates. The US Gulf has seen fresh activity and was well supported with rates east hovering around $15,500 daily and $550,000 bonus. South America trading has largely been sluggish with rates under $15,000 daily and $500,000 bonus and remained the trading ground for ballasters from Southeast Asia.

In the East, there was increased activity with a good volume of fixing although much of this remained under wraps. Added to this there was some fresh interest for ships to do US Gulf round voyages with a 16-year old 70,000 tonner in North China fixed at $6,500 daily for a US Gulf round plus more NoPac business. Rates appeared to have steadied with a 75,000 tonner open in Dalian fixed a Dalrymple round voyage at $6,000 daily. There was also the first indication of rates for trips to Europe with an LME reportedly agreeing $2,500 daily for a trip to the UK-Continent with minerals. A 74,000-tonner in Hong Kong was rumoured to have been booked for 4 to 6 months at around $8,000 daily – a good rate when compared with the current spot market.

It has been another lacklustre week for the Supra market although in some areas the rate of decline seemed to have slowed , with some suggesting that the market may have reached a floor for the time being. In the US Gulf there was little reported activity although a 2012 built 58,000 dwt vessel was booked from the Texas Gulf to Turkey at a reasonable $12,600 daily, although it was thought the vessel may have waited a few days for the business having ballasted from East Coast Mexico. The market in the Indian Ocean remains difficult for the owners.

Handysizes, Continent apart, remain in the doldrums, the US Gulf remains flat to inactive and South America has succumbed to the sheer weight of tonnage. A modern Handy was rumoured to be trading a trip from the Amazon to the north Continent in the mid $7,000’s and another modern type allegedly went for a trip from South Brazil to Morocco at $9,000 daily.   

It has been another quiet week in the East with some short period activity emerging at rates in the mid $8,000’s up to about $9,000 daily; slightly lower than of late but probably showing better returns than the spot market. Rates for Handysizes still compare rather favourably with Super types, a modern 29,000 tonner secured $7,000 daily from Singapore for 2 to 3 laden legs trading in the East, although the vessel ballasted just over a day to deliver.

Thanks for listening