June 16, 2014 - June 20, 2014

Weekly Dry Bulk Observation

The international dry bulk market ended last week with the Baltic Dry Index (BDI) at 904 points, a decrease of just 2 points from a week ago. Capesize rates have increased as Chinese demand for imported iron ore cargoes remains very strong. Panamax rates have 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. This has been the case for the last several weeks. In total, 119 dry bulk vessels were chartered in the spot market last week. This is 18 more than were chartered during the previous week. A total of 8 dry bulk vessels were chartered for period deals last week, which was 2 less than the previous week.

Capesize vessels

Capesize rates ended last week averaging $14,251/day, which was an increase of $1,201 (9%) from a week ago. Spot Australian iron ore cargoes stayed very firm last week, with all of the major players again very active. 19 spot Australian iron ore cargoes surfaced in the market last week which was just 1 less than the previous week. In addition, a moderate amount of Brazilian spot iron ore cargoes have continued to surface. 9 spot Brazilian iron ore cargoes surfaced last week, which was 1 more than surfaced in the market during the previous week. The rate of the Australia-Qingdao route has risen by 3.0% to $7.986/ton. The daily cost to charter a capesize vessel for a Pacific round-trip voyage has increased by 2.2% from a week ago to $11,768/day. The rate of the Tubarao-Qingdao route has risen by 11.1% from a week ago to $22.495/ton. The rate of the Tubarao-Rotterdam route has risen by 13.4% from a week ago to $9.489/ton. In addition, the daily cost to charter a capesize vessel for an Atlantic round-trip voyage has increased by 11.5% to $12.935/day. In the time charter market, the capesize time charter market was less active last week as two capesizes vessels were chartered for period deals. This is two less than were chartered during the previous week. Most recently, a 176,000 dwt vessel was chartered for 5 to 8 months at $21,500/day.

Panamax Vessels

Panamax rates ended last week averaging $3,702/day, which was a decrease of $968 (21%) 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. Really, not much has changed in the panamax market recently and it makes a great deal of sense for panamax owners to scrap their vessels. Easily, owners can bring in at least $4 million if they scrap a panamax vessel. The rate of the Atlantic to Far East route has fallen by 10.9% from a week ago to $10,261/day. The daily cost to charter a panamax vessel for an Atlantic round-trip voyage has declined by 58.2% from a week ago to $869/day. The daily cost to charter a panamax vessel for a Pacific round-trip voyage has decreased by 22.1% from a week ago to $3,642/day. The rate of the Far East to Europe route has decreased by 91.8% to $34/day. In the time charter market, the panamax time charter market was active again last week as five panamax vessels were chartered for period deals. This is the same amount that were chartered during the previous week. Most recently, an 81,000 dwt vessel was chartered for 10 to 13 months for $10,900/day.

Supramax Vessels

Supramax rates ended last week averaging $7,356/day, which was a decrease of $466 (6%). While down again from a week ago (primarily due to supramax fleet growth staying high), the supramax market continues to fare much better than the panamax market as supramax fleet growth is much lower than panamax fleet growth. The rate of the US Gulf-Europe route has fallen by 1.2% to $8,978/day. The rate of the Black Sea to Far East route has fallen by 4.5% to $9,578/day. In addition, the rate of the Europe-Far East route has fallen by 3.8% to $11,669/day. The cost to charter a supramax vessel for an Asia-NOPAC or Australian round-trip voyage has fallen by 4.7% to $7,359/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.