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Lay ups looming for Panamaxes?

By • Jun 16th, 2014 • Category: Dry Cargo

The Coracle Dry Cargo podcast for week ending June 13, 2014 in association with The Baltic Exchange

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Thanks for downloading the dry cargo market report from and the Baltic Exchange for week ending June 14th 2014. This report looks at the Capesize and Panamax markets.

It was a disappointing end to the week for the Capesize sector with rates slipping under $8 on the key West Australia/China run. At the end of the week rates dropped to $7.75 with a 170,000 tonne 10% cargo fixed from Dampier to Qingdao for 1 July onwards. The week saw a promising start with rates nudging $8.50, but by mid-week the mood changed, despite ongoing interest from the major Australian shippers. This had a knock on effect with timecharter rates slipping and cargoes from Saldanha to Qingdao easing back to $14.50 for 160,000 tonne 10% cargoes. The market lacked significant activity from Brazil and Tubarao/Qingdao rates dropped to $20.50.

In the Atlantic, fronthaul timecharter activity was limited although there was a rumour a ship had agreed $34,000 daily for a longer run east. There were mixed views for transatlantic activity with some people esuggesting that owners were chasing business and the round voyage rate was nearer $12,000 daily. A Bolivar/Rotterdam cargo was done at $10.25.

Now the Panamax sector where some people are comparing the current market to the dark days of 1983-84. The short term outlook remains extremely gloomy with rates approaching levels that could see owners lay-up. At current rates, owners might be idling ships but operators have little choice but to chase the market. With the traditionally slow European summer months approaching most were pinning their hopes on the last quarter. Spot market rates were dire with transatlantic rates little more than the mid $2,000 daily range with some suggestions that this was an ‘optimistic’ return on some of the voyage business concluded. Fronthaul cargoes for ships open north Atlantic remained scarce and the market from the US Gulf remained APS basis with rates translating to significantly under $12,000 daily. The DOP equivalent is barely $10,000 daily. There was talk of forward grain being booked at relatively decent numbers from the gulf, but from South America charterers were aiming at under $32 for Brazil to China.

In the East, owners and operators have little choice but to stay in the area with this market now APS in all areas. There was a step up in activity from the US north Pacific and Canada, but this had little impact. A 75,000 tonner fixed APS Vancouver for a run east at $6,000 daily plus a $225,000 bonus. Further south rates were even worse with owners scrabbling for quick Indonesia business with rates around $5,000 to $6,000 daily plus bonuses around $50,000 daily. The longer trips to India were showing just over $6,000 daily for kamsarmaxes.

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