June 23, 2014 - June 27, 2014

Weekly Dry Bulk Observation

The international dry bulk market ended last week with the Baltic Dry Index (BDI) at 831 points, a decrease of 73 points (8%) from a week ago. Freight rates in the dry bulk market came under pressure in all vessel classes as global spot chartering activity decreased last week. Panamax rates remain very low, as panamax fleet growth has remained high while the panamax market also continues to see a large amount of new vessels delivered to the market this year. In total, 103 dry bulk vessels were chartered in the spot market last week. This is 16 less than were chartered during the previous week. A total of 4 dry bulk vessels were chartered for period deals last week, which was 4 less than the previous week.

Capesize vessels

Capesize rates ended last week averaging $12,741/day, which was a decrease of $1,510 (11%) from a week ago. Spot Australian iron ore cargoes stayed relatively firm last week, with all of the major players again very active. 14 spot Australian iron ore cargoes surfaced in the market last week which was just 5 less than the previous week but is still very a firm amount. A small amount of Brazilian spot iron ore cargoes surfaced however. Only 5 spot Brazilian iron ore cargoes surfaced last week, which was 4 less than surfaced in the market during the previous week. The rate of the Australia-Qingdao route has fallen by 2.7% to $7.768/ton. The daily cost to charter a capesize vessel for a Pacific round-trip voyage has declined by 12.9% from a week ago to $10,250/day. The rate of the Tubarao-Qingdao route has declined by 3.7% from a week ago to $21.664/ton. The rate of the Tubarao-Rotterdam route has fallen by 1.8% from a week ago to $9.317/ton. In addition, the daily cost to charter a capesize vessel for an Atlantic round-trip voyage has decreased by 16.2% to $10,840/day. In the time charter market, the capesize time charter market was less active last week as only one capesize vessel was chartered for a period deal. This is one less than was 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 $3,362/day, which was a decrease of $341 (9%) from a week ago. A large amount of South American grain cargoes surfaced again last week, but panamax fleet growth simply remains too high and has put a tremendous amount pressure on panamax freight rates. It continues to make a great deal of sense for panamax owners to scrap their panamax vessels, as panamax owners can easily bring in at least $4 million (and often much more) if they scrap a panamax vessel. The rate of the Atlantic to Far East route has fallen by 5.6% from a week ago to $9,690/day. The daily cost to charter a panamax vessel for an Atlantic round-trip voyage has declined by 20.6% from a week ago to $690/day. The daily cost to charter a panamax vessel for a Pacific round-trip voyage has fallen by 111% from a week ago to $3,236/day. The rate of the Far East to Europe route is now in the negatives and currently stands at -$167/day. In the time charter market, the panamax time charter market was less active last week as two panamax vessels were chartered for period deals. This is three less than were chartered during the previous week. Most recently, an 82,000 dwt vessel was chartered for 4 to 7 months for $8,750/day.

Supramax Vessels

Supramax rates ended last week averaging $7,093/day, which was a decrease of $263 (4%). While down again from a week ago, supramax rates remain well above panamax rates even though panamax vessels can carry a great deal more cargo. Supramax rates are not under extreme vessel supply related pressure like the panamax market is. The rate of the US Gulf-Europe route has fallen by 9.1% to $8,161/day. The rate of the Black Sea to Far East route has fallen by 3.9% to $9,206/day. In addition, the rate of the Europe-Far East route has fallen by 3.8% to $11,225/day. The cost to charter a supramax vessel for an Asia-NOPAC or Australian round-trip voyage has increased slightly, however, to $7,406/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 again last week.