June 2, 2014 - June 6, 2014

Weekly Dry Bulk Observation

The international dry bulk market ended last week with the Baltic Dry Index (BDI) at 989 points, an increase of 55 points (6%) from a week ago. The capesize market saw a great surge, as demand for capesize vessels remains strong while capesize fleet growth has continued to slow. This is the recipe for a strong capesize market this year, with capesize rates already finding significant support in the second quarter of this year. Prospects for the third and fourth quarter of this year are even brighter, as last week alone capesize rates jumped by 34%. In total, 113 dry bulk vessels were chartered in the spot market last week. This is 31 more than were chartered during the previous week. A total of 5 dry bulk vessels were chartered for period deals last week, which was the same amount as the previous week.

Capesize vessels

Capesize rates ended last week averaging $13,370/day, which was an increase of $3,384 (34%) from a week ago. Spot Australian iron ore cargoes remained very firm last week, with all of the major players again very active. 23 spot Australian iron ore cargoes surfaced in the market last week which was an impressive amount and 4 more than surfaced during the previous week. In addition, a larger amount of Brazilian spot iron ore cargoes surfaced. 9 spot Brazilian iron ore cargoes surfaced last week, which was 3 more than surfaced in the market during the previous week. The rate of the Australia-Qingdao route has increased by 6.3% to $8.159/ton. The daily cost to charter a capesize vessel for a Pacific round-trip voyage has risen by 16.9% from a week ago to $11,905/day. The rate of the Tubarao-Qingdao route has risen by 13.9% from a week ago to $21.945/ton. The rate of the Tubarao-Rotterdam route has risen by 13.4% from a week ago to $8.594/ton. In addition, the daily cost to charter a capesize vessel for an Atlantic round-trip voyage has increased by 55.4% to $13,250/day. In the time charter market, the capesize time charter market was more active last week as four capesizes vessel were chartered for period deals. This is two more than was chartered during the previous week. Most recently, a 172,000 dwt vessel was chartered for 3 to 5 months for $20,000/day.

Panamax Vessels

Panamax rates ended last week averaging $5,838/day, which was a decrease of $1,155 (17%) from a week ago. A large amount of South American grain cargoes surfaced again last week but panamax fleet growth remains very high and this is still putting pressure on panamax freight rates. The rate of the Atlantic to Far East route has decreased by 7.6% from a week ago to $12,842/day. The daily cost to charter a panamax vessel for an Atlantic round-trip voyage has decreased by 37.1% from a week ago to $3,658/day. The daily cost to charter a panamax vessel for a Pacific round-trip voyage has fallen by 16.4% from a week ago to $5,725/day. The rate of the Far East to Europe route has decreased by 19.7% to $1,128/day. In the time charter market, the panamax time charter market was less active last week as only one panamax vessel was chartered for a period deal. This is one less than was chartered during the previous week. Most recently, an 81,000 dwt vessel was chartered for 12 months for $10,500/day.

Supramax Vessels

Supramax rates ended last week averaging $8,389/day, which was a decrease of $289 (3%). While down again from a week ago (primarily due to supramax fleet growth remaining high), the supramax market continues to fare much better than the panamax market. The rate of the US Gulf-Europe route has declined by 4.3% to $10,033/day. The rate of the Black Sea to Far East route has fallen by 2.6% to $10,578/day. In addition, the rate of the Europe-Far East route has fallen by 2.4% to $12,463/day. The cost to charter a supramax vessel for an Asia-NOPAC or Australian round-trip voyage has fallen by 3.9% to $8,313/day. In the time charter market, the supramax time charter market was not at all active last week. No supramax vessels were chartered for period deals. This is one less than was chartered during the previous week.