June 9, 2014 - June 13, 2014

Weekly Dry Bulk Observation

The international dry bulk market ended last week with the Baltic Dry Index (BDI) at 906 points, a decrease of 83 points (8%) from a week ago. Capesize rates came under only very a small amount of pressure, as Chinese demand for imported iron ore cargoes remains very strong. Panamax rates continued to come under a large amount of pressure, however, as panamax fleet growth has remained high. More panamax owners are scrapping their panamax vessels now, as global scrap prices remain very high and panamax freight rates are set to remain low. In total, 101 dry bulk vessels were chartered in the spot market last week. This is 18 less than were chartered during the previous week. A total of 10 dry bulk vessels were chartered for period deals last week, which was 5 more than the previous week.

Capesize vessels

Capesize rates ended last week averaging $13,050/day, which was a decrease of $320 (2%) from a week ago. Spot Australian iron ore cargoes stayed very firm last week, with all of the major players again very active. 20 spot Australian iron ore cargoes surfaced in the market last week which was a large amount (but 3 less than surfaced during the previous week). In addition, a moderate amount of Brazilian spot iron ore cargoes surfaced. 8 spot Brazilian iron ore cargoes surfaced last week, which was just 1 less than surfaced in the market during the previous week. The rate of the Australia-Qingdao route has fallen by 5.0% to $7.755/ton. The daily cost to charter a capesize vessel for a Pacific round-trip voyage has declined by 3.29% from a week ago to $11,523/day. The rate of the Tubarao-Qingdao route has declined by 6.5% from a week ago to $20.514/ton. The rate of the Tubarao-Rotterdam route has declined by 2.6% from a week ago to $8.367/ton. In addition, the daily cost to charter a capesize vessel for an Atlantic round-trip voyage has decreased by 12.5% to $11,600/day. In the time charter market, the capesize time charter market remained active last week as four capesizes vessel were chartered for period deals. This is the same amount that was chartered during the previous week. Most recently, a 175,000 dwt vessel was chartered for 12 to 14 months at an index-linked rate.

Panamax Vessels

Panamax rates ended last week averaging $4,670/day, which was a decrease of $1,168 (20%) 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. Going forward, more and more owners would be smart to scrap their panamax ships and take advantage of very robust global scrap prices. The rate of the Atlantic to Far East route has decreased by 10.4% from a week ago to $11,511/day. The daily cost to charter a panamax vessel for an Atlantic round-trip voyage has fallen by 43.1% from a week ago to $2,081/day. The daily cost to charter a panamax vessel for a Pacific round-trip voyage has decreased by 18.3% from a week ago to $4,675/day. The rate of the Far East to Europe route has decreased by 63.3% to $414/day. In the time charter market, the panamax time charter market was more active last week as five panamax vessels were chartered for period deals. This is four more than were chartered during the previous week. Most recently, an 82,000 dwt vessel was chartered for 12 months for $10,000/day.

Supramax Vessels

Supramax rates ended last week averaging $7,822/day, which was a decrease of $567 (7%). 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 supramax market is facing much less fleet growth than the panamax market. The rate of the US Gulf-Europe route has fallen by 9.4% to $9,089/day. The rate of the Black Sea to Far East route has fallen by 5.2% to $10,033/day. In addition, the rate of the Europe-Far East route has fallen by 2.7% to $12,131/day. The cost to charter a supramax vessel for an Asia-NOPAC or Australian round-trip voyage has fallen by 7.1% to $7,725/day. In the time charter market, the supramax time charter market was a bit more active last week. One supramax vessel was chartered for period deals. This is one more than was chartered during the previous week. Most recently, a 55,000 dwt vessel was chartered for 3 to 5 months for $10,500/day.