Dry Cargo Broker Viewpoint (16 Mar 2018)

There are still signs of positivity pushing through in the Capesize derivatives trade, we are told, with early trading on Thursday hinting at a revival by the weekend. No such luck, however, on the spot mar­ket, despite a notable increase in Atlantic fixing and short period trading. Cargo volumes have remained stubbornly limited on the Capesize market, so rates have continued to slide in response. With no reason for a trans-Atlantic market to stay aloft, TARV rates plummet at week’s end by more than US$ 1,500 to settle in the low US$ 6,000s daily and below opex.

A consensus is building among Panamax observers and traders that the mid-range bulkers are poised for a quite positive 6-8 weeks ahead as a combination of oncoming South American grain cargoes—driven by strong eastbound demand—and slimming tonnage availabilities generate a bullish upward spiral in spot freights in the Atlantic. Even as current spot markets stagnate around last-done rates and activity takes a breather, a strong upside remains in place for the near term with front hauls likely to shoot back into the US$ 20,000s by the end of the month, if not already next week. TARV rates are hovering in the low-middle teens of around US$ 13-14,000 daily.

Handy bulk has had a good run through the week, emerging as the only bulker sector to boast contin­ued growth and consistently bullish gains in rates both East and West. The USG, as is often the case, seems to be the primary catalyst here as front hauls to S’pore-Japan move into the middle US$ 20,000s of US$ 25,500 daily plus and as high as US$ 26,000 daily on Ultramax tonnage of 58-62,000 dwt. Niche mineral demand also appears to have returned to Southeast Asia with multiple orders for nickel ore via the Philippines pushing Supramax spot rates on Chinese redelivery into the range of US$ 13-14,000 daily. Buoyancy should persist into next week.

…read more in today’s BMTI Daily Report.

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