Dry Bulk Freight Market Ends February Lull

Freight rates are raring to go after a long break of the Lunar New Year. With cargo volume returning in the Asia-Pacific and Atlantic capesize market, and strong bids seen in the supramax paper market, the Baltic Dry Index (BDI) has climbed to a three week high on Thursday, 22 February at 1,167, up 21 points at day-on-day basis.

News ID: 78662

Date: 27 February 2018 - 09:32

As the Chinese trade participants began to return to the market, capesize physical activities in west coast Australia for iron ore loading have taken up paces, MANA correspondent reported.

However, there is some market concerns if the capesize paper market has risen too high for any potential buyers.

“The recent buying appetite reflected the anticipation that freight rates are making a comeback in 2018,” said a FIS FFA shipbroker.

As such, capesize paper market firmed at trading at high premium to the physical market with capesize 5 time charter average reached $12,941, up $679 on-day at Monday. Then on Tuesday, the capesize 5 rates went up higher to $13,401, up $460 with the buyers pulling from recent highs, while sellers not chasing them lower. Thus, the capesize 5 rates suffered at dip of $134 on Wednesday to $12,262, as the physical market struggled to reverse the slide.

“Without a swift improvement in the physical on Wednesday, the current FFA rates may prove too much to buy into for many,” explained the shipbroker.

Eventually by the end of the week, the capesize physical market did improve with many fixing in the East Asia, with the miners getting in the thick of the actions with much bookings for March laycan.

Panamax market has a much quieter start as compared to capesize, with panamax time charter average remained largely static at the $10,600 level before surging toward $11,500 later at the week.

“Another busy day on panamax with buyers once again returning to the market”, commented a FIS shipbroker on the Thursday paper market.

During that trading day, the panamax prompt periods hit new highs with March trading up to $13,400 and Q2 printing at $14,250 whilst deferred saw renewed interest as Cal19 reached $12,500. Therefore, the Panamax time charter average closed at $11,529 on Thursday, up $397 day-on-day.

Supramax then witnessed strong bid toward later in the week with the time charter average hiked to $9,937 on Thursday, up $198 day-on-day. March contracts then reached a new high of $12,100 and the Q2 was paid $13,000.

“The supramax paper market once again witnessed the positive momentum seen of late with rates pushing throughout Thursday,” concluded one FIS shipbroker.

In contrast, the handysize market saw rather little movement except on Thursday, where rates went up by $110 day-on-day to $7,756.