BMTI Far East Handy Bulk – Week in Review (8 Oct 2018)

Coal freights on a 52,000 dwt Newcastle/Huangpu

A week of holidays in the Far East had a notable impact on dampening activity throughout the Pacific and Indian Ocean trade areas. Freights, however, remained miraculously solid and, in some cases, even mildly bullish with Pacific rounds fetching upwards of US$ 11,750 daily on modern Ultramax tonnage in the 58-62,000 dwt range. Such rates are as much as US$ 100-200 higher than a week ago, suggesting that charterers are willing to pay a little bit extra if only to secure employment before they rush off to the holidays. Period activity has been somewhat mixed but still present with larger Ultra­maxes of 60-64,000 dwt fetching up to US$ 15,500 daily on medium period deals for 4-6 months and 5-8 months of trading on worldwide redelivery. Indo­nesia rounds were also steady and barely shifted over the past week with the Tess 58 vessels fixing US$ 12,500-12,750 daily spot rates on trips from South China via Indonesia to EC India and as much as US$ 13,000 daily to WC India. Chartering activity is nonetheless subdued, and owners are hoping the week ahead will put an end to the dry spell as bro­kers and traders return to full business engagement. Like the larger Supramaxes and Ultramaxes, Handy­size activity was largely limited and sporadic across the eastern basin with holidays taking some of the blame. Freights were also largely unmoved in the past week with the lack of business contributing to a general holding pattern that kept the market in limbo until traders resumed their work. Freights for 28,000 dwt ships from Southeast Asia to NoPac via Australia continue to achieve about US$ 8,200 daily, just as they did at the end of September.

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Dry Bulk Market – Shipbroker Overview (18 July 2018)

Through all the ups and downs and inter-week vol­atility, it seems that Capesize freights have finally climbed to new year-to-date highs, proving that the bullishness is hardly a temporary fluke but rather a underlying feature of a newly confident spot market. With China/Brazil RVs reaching US$ 23,000 daily, the highest level this year so far, and the equivalent voyages hitting similar highs of US$ 22.6/mt, this summer is shaping up to be a very generous one for the biggest bulkers. Pacific rounds have seen even stronger improvements of US$ 1,000 at midweek, taking the assessment into the US$ 22-23,000 daily range and giving shipowners cause for celebration.

Even as the Pacific Panamaxes lag behind, improve­ments have been strong enough in the West to add to the BPI reaching its highest level in four months and owners looking for upgrades where they would not have dared just two weeks ago. Robust demand for coal to India, in the midst of monsoon season no less, has contributed to tightening tonnage in the Indian Ocean even as it hasn’t been enough to close the gap on available tonnage yet and drive rates up­ward. Indo rounds are still fetching US$ 11-12,000 daily on HK delivery to ECI on Kamsarmax tonnage.

Supramax rates South Africa to India

Handysizes have been rebounding in the Atlantic basin with average trans-Atlantic freights on 28,000 dwt tonnage reaching the five-digit range of the low-middle US$ 10,000s on ECSA trips to the Continent and up to US$ 12,000 on the same run with 38-42,000 dwt vessels. Handysizes from the USG have been securing high US$9,000s on NCSA redel while the rest of the Atlantic is more hit or miss. Front hauls ex-Black Sea to the Far East have revived of late with US$ 18,500 daily now doable on a Tess 58.

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BMTI’s Continental Broker — Handy Bulk Viewpoint (12 July 2018)

handysize 185The chartering community is closely watching the upward rally in the Black Sea area. Charterers were bidding Ultramaxes US$19,000 daily versus owners testing number of US$ 22,000 daily. Given this, one wonders where this development might lead to. Based on a steady demand, rate levels could reach US$ 30,000 daily, which then in turn would attract ballasters from North Africa and Red Sea, to name just a few areas. Inevitably other areas will benefit such as Continent from where charterers need to pay rates stopping owners from ballasting straight to the Med, which is only a couple of days away. It can be taken for granted that the next reported front haul fixture will be above US$ 20,000 daily. Grain rates to Saudi Arabia for 60,000mt are likely head towards US$ 25/mt. In sharp contrast Supra tonnage can still be fixed at US$ 6,500 daily for a trip to the US Gulf.

From ECSA Ultramax tonnage was traded around US$ 12,500-13,000 daily for a trip to the US Gulf. Supramax rates to the Continent-Med are still dis­appointingly weak hovering at around US$ 13,000 daily. The front haul runs have been done at rates of around US$ 14,500 daily plus US$ 450,000 BB for Ultramaxes. Tonnage of 35,000dwt has been offered US$ 10,000 daily from North Brazil to the Baltic. From the USG, the Centurion fixture at US$ 20,750 daily to WCCA, if correctly reported, looks like a promising figure and looks as if the market is in the process of changing direction for Ultra-Supramax tonnage. Handysizes are more difficult to cover with tonnage ballasting from the USEC to the US Gulf.

The market in the East has taken a painful direction for owners with nickel ore charterers getting away with rates below US$ 10,000, which is very disturb­ing. Ultramaxes were traded at around US$ 12,500-13,000 for 4-6 months trading with a lower rate for the first 30 days to reflect the poor spot market. Handysizes are holding steady whilst owners’ bull­ishness is met with calm by charterers. Despite sev­eral owners holding out for US$ 10,500-11,000 for a NoPac RV there is always the possibility to find tonnage of 33-36,000 dwt below US$ 10,000 as happened. CIS charterers were seeing 37,000 dwt at US$ 9,500 daily from North China via CIS to P.I.

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Dry Bulk Commodity News (July 5, 2018)

Black Sea grain producers have been showing mixed results so far this year. An ongoing dry period throughout the region could adversely impact the harvest in 2018 with experts saying it may affect Ukraine’s harvest by as much as 50%. Russia recently revealed that its exports over the past 12-month period amounted to 51.2 Mt, a 48% increase from the previous season. Russia conversely expects to see lower results this year with domestic agriculture agencies estimating the crop will be as much as 15% lower this year than last year due to poor weather conditions. Last year’s 134 Mt harvest was an all-time record and unlikely to be bested in the near term. Reductions in volume this year may be even lower than previously expected with analysts Sov­Ekon having reduced their estimates for the year from 200 Mt to 124 Mt. IKAR reduced its estimates for the Russian grain crop from 117 Mt to 114 Mt.

Strong consumption of coal in Asia has boosted de­mand for Australian thermal coal this year, this week pushing the spot price for prices at Newcastle to US$ 120/mt FOB, the highest they’ve been in six years. Demand has been brisk to China, which con­tinues to burn coal for power and industry, as well as Japan, which buys 40% of Australia’s total thermal coal exports for its own utilities. The price surge has been further exacerbated by limited supply from mines, many of which have closed or wound down operations in recent years, even as the summer months are demanding more power consumption due to rising cooling requirements around the globe.

The EU is to make a ruling on whether to lift anti-dumping duties on Russian ammonium nitrate following the results of two interim revives on AN duties on Russian exported product last year. The results are expected in early-mid August. At issue is a current duty on Russian AN, which is considered significantly cheaper than European AN, with duties ranging from EUR 24/mt to EUR 47/mt, depend­ing on trade conditions. One argument for lifting the duties would be providing cheaper fertilizer costs for European farmers. The first AN anti-dumping meas­ures were issued in 1995 and have been intermit­tently reinstated at different periods ever since.

Prices for Turkish scrap imports remained largely stable in the past week after a period of increasing in the last weeks of June. There are reports, however, that at least one buyer of auto bundle scrap increased its buy price to about US$ 331/mt FOB last week.

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BMTI Dry Bulk Overview (July 3, 2018)

dry bulk terminalWith markets in flux, resource prices shifting and sentiment turning around among the biggest bulk­ers, there is reason to expect a robust recovery in Capesize rates. On the other hand, we’ve been here before and rather few are convinced that any sustain­able rebound is behind the current bounce. None­theless, day-on-day gains of US$ 1,000 across the board are injecting the market with a sense of opti­mism as TARVs move toward US$ 21,000 daily. Period deals have been getting fixed in the low US$ 20,000s with at least one medium period deal hav­ing exceeded US$ 23,000 daily on a 180,000 dwt.

Tentatively, Panamaxes start the week with freights ever so vaguely trending in owners’ favour even as it remains exceedingly clear that markets are still rather indecisive as to where rates will go in July. Business activity is higher than it has been for some time, at any rate, especially for the start of the week, so this was taken as a positive sign by the more optimistic owners. Period business, as with Capes, has accel­erated of late with short periods at US$ 13,000 plus.

There are mixed reports from the Black Sea about Handy bulk business, but we are hearing from some traders that front haul trips are poised for improve­ment as freights of US$ 15,000 daily move into the US$ 16,000s for middle-July dates. The Atlantic is nevertheless rather calm if compared to its eastern counterpart as Southeast Asia starts showing signs of recovery with handful of northbound trips in the US$ 11,000s daily on modern Ultramax tonnage.

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Short Sea: Falling Bunkers Lower Costs on Summer Freight

Baltic Westward Rates[27 JUNE 2018] With both European holidays and sluggish summer industrial trends setting in, pressure continues to grow on rates in the northern short sea markets even as owners manage to keep discounts limited. Oper­ating costs, as always the basement level for rates to fall, have themselves taken a hit in recent weeks with bunker prices having progressively fallen, giving owners one fewer negotiating tool in keeping rates steady, if not higher. Freights in the high teens of EUR 17-18/mt on the Baltic westward routes from Balticum to ARAG (based on 3,000mt general cargo parcels) have moved slowly but surely into the mid teens of EUR 15-16/mt on the same run, brokers report. ECUK cargoes of 5,000mt are still securing around EUR 10-12/mt, depending on terms, to ARAG. Southbound spot freights remain relatively more attractive as southern European trade regions continue to attract higher activity and firmer rates than their northern counterparts. Agri-prods with stowage of 44-48′ are seen fetching EUR 24-26/mt, traders report, on business from the Upper Baltic to the French Mediterranean, more or less unchanged from rates on the same run since late May. Similar rates are reported as concluded on WCUK/Marmara business. Northbound rates from the Spanish Med to ARAG are fetching high teens of EUR 16-18/mt on mid-size parcels of 5,000mt while the same to the Upper Baltic is getting as high as EUR 22/mt. Upper Baltic to Ireland is still in the lower EUR 20s/mt, we are told, with owners keeping charterers at bay with EUR 21/mt as the lowest offer accepted.

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BMTI’s Continental Broker — Handy Bulk Viewpoint (22 June 2018)

HandysizeBrokers have been surprised by the huge number of fixtures reported, detrimental to the market’s performance. The Continent appears steady for Handies. Scrap charterers took 30,000 dwt ton­nage at US$11,000 daily to the East Med, grain char­terers were rating 35,000 dwt tonnage at US$ 9,500 daily to cover Rouen/Algeria. A similar rate this size of vessel should be worth for a trip to the US Gulf.

The Black Sea remains dispiriting with grain charter­ers trying to undercut last-done fixtures. From West Africa, Chinese log charterers keep searching for logger types and even Supramax tonnage to carry logs to China at levels around US$ 12-13,000 daily for 36-38,000 dwt tonnage and around US$ 13-14,000 for Supramax tonnage, respectively. The ECSA trade region has been slow with coastal charterers trading a 34,000 dwt vessel at around US$ 9,500 daily for 2 laden legs. The US Gulf re­mains disappointing for Handysize owners whilst the larger sizes keep thriving, with a 52,000 dwt taken for an inter-Caribbean employment at US$ 13,750 daily, and a similar size was fixed to Japan at a very good US$ 19,000 daily. Another 57,000 dwt was taken for a trip to the Med at US$ 15,500 daily. Handysize tonnage has been offered at just below US$ 30/mt for a grain cargo to Pisco, Peru, which looks very high in comparison with a rate of US$ 26/mt that was indicated for a 30,000mt cargo from Montreal to WCCA, which according to shipbrokers equates to something around US$ 12,500 daily. South African brokers have been talking of a fairly quiet week with Supramax rates to India hovering at around US$ 12,250 daily plus US$ 235,000 BB. An Ultramax vessel was done to China at an APS rate of US$ 13,500 daily plus US$ 350,000 BB. An okay rate of US$ 11,750 daily was conceded to owners of a 57,000 dwt Dolphin type vessel for a Mombasa round voyage with delivery and redelivery Richards Bay. Just recently an Ultramax was taken for a trip to the US Gulf at US$ 10,500 daily. Handysize charterers, who have been actively fish­ing for Handysize rates for a trip to the East, were told about the rather punchy freight of US$ 14,000 daily by the owners of a 36,000 dwt vessel.

The East has been suspiciously quiet, which either means that charterers are taking a breather and plan to return to the market next week or that the market is changing direction. Salt charterers have been rating a high consumer 35,000 dwt at US$ 8,500 daily for an Australian round voyage with delivery Singapore.

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BMTI Dry Bulk Overview (19 June 2018)

Panamax bulkerVery little in the way of trend or market movement was sensed at the start of the week for Capesize rates with traders playing hard to get on both sides of the fence. Given the utter lack of tangible activity, rate assessments wasted no time in slipping with nearly all rates trending either sideways or down. Perhaps most decreased were the front haul freights from the UKC, losing US$ 200 day-on-day to US$ 33,500. Panamaxes were arguably the busiest bulker sector at the start of the week, thanks in no small part to overflow from last week’s watershed activity, but even so there was little for the market to hang its hat on looking ahead. Trans-Atlantic RVs have become a victim of the current indecisiveness, dropping more than US$ 300 on average rates to close in the US$ 11-11,500 daily range on shipments of 72-76,000 dwt from the Continent. The Indonesia rounds have been hovering in the US$ 13-14,000 daily range. A group of countries—Malaysia, Philippines, Thai­land, Vietnam and Pakistan—will pick up the slack in lost coal demand in the next few years, says Drewry, with Malaysia and Thailand increasingly dependent on imports for coal usage. Philippines and Vietnam are likely to see slow growth in domestic coal output, meaning increased imports in the near term. As such, Southeast Asia will con­tinue to draw the focus of Pacific coal transport growth away from China.

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BMTI’s Dry Cargo Market Viewpoint (11 June 2018)

Sentiment has taken over the Capesizes, but in the positive way that owners have no problem with accepting even as the party looked like it might have ended by the weekend. With losses of US$ 1,000 seen on the Pacific rounds on Friday and average rates slipping back into the high teens of US$ 18-19,000 daily, there is speculation that a new bearish cycle could be awakening. On the other hand, we have seen such short-lived corrections before, and owners hope this is the case this time as well. Brazil/China voyages had been pushing toward US$ 20/mt, but no it would seem that any owner who managed to fix above US$ 19/mt in the recent fren­zy should consider themselves fortunate. TARVs have levelled out in the US$ 17-18,000 daily range.

Period TCs really is the name of the game for the Panamaxes at this point with a resurgence of activity in long-term time charters having forced charterers to show their cards and put upwards of US$ 14,500 daily and higher on medium period deals on 82,000 dwt vessels via Southeast Asia. Short period on the standard tonnage is also going for strong rates in the US$ 13,500 daily vicinity on 3-5 months of trading, though some brokers say the enthusiasm has cooled a bit on period charters. North Atlantic-positioned owners say that open tonnage is tightening there.

Even with much of Europe in Athens for Posidonia, the loss of Handy traders seemed to have had little negative impact on trading on the other side of the Atlantic with the USG revival full steam ahead and upwards of US$ 300 added to front hauls and UK-Continent redelivery rates from the USG on Ultramax vessels hitting rates in excess of US$ 20,000 daily and US$ 15,250 daily, respectively, with no let up in sight.

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Short Sea: Baltic Owners Settle in for Summer Season (06 June 2018)

short sea mapThe summer market has begun in earnest and is turning rather quiet in June after a relatively robust May. Brokers and owners note that even with the modest slump in the past few weeks, rates have enjoyed a solid year-on-year improvement thanks in part to a ‘fantastic’ winter period that was far better than historically the norm. The fertilizer season is over in the north, for all intents and purposes, giving less urgency to agri-prod markets and the Baltic Sea and North Sea markets at large. More vessels are spot than in weeks past and charterers are starting to feel their negotiating power grow. With the bottom yet to be reached (perhaps getting closer by end-June), bunker prices are the new ‘red line’ deciding just how far owners will be willing to compromise on rates yet still cover their operating costs. With a growing upside on oil prices, due to supply concerns from Iran, and the fact that bunkers are now up some 25% from March, rising bunker prices would be the one countering factor owners may have in their arsenal to offset unlimited rate erosion.

Rates are down by some EUR 3/mt on average compared to the winter and there is a growing possibility that they will start falling more sharply if June remains as quiet as it seems to be now. On the plus side, we are told that more charterers are looking for time charter period contracts, which is already unusual for the European market, but also indicates that charterers feel as if the market could very well start improving after the summer and remains in a modest bullish mode in the current supercycle. The persistent lack of tonnage in the European short sea market, thanks to a nearly nonexistent newbuilding programme, ensures that freights will likely bounce back as soon as the slightest uptick in transport demand is per­ceived. For the moment, however, bearish trends are likely to gain force. Barley cargoes of 3,000mt have been reported from Denmark to Rotterdam at EUR 15.75/mt. Peas of 3,800mt have been secured from the Upper Baltic to Rouen at EUR 24/mt. General cargoes, as per BMTI’s benchmark westward route implies, are getting high teens of EUR 17-18/mt on 3,000mt parcels from Klaipeda to ARAG. Fertilizers of 2,000mt have secured very strong rates of EUR 39-41/mt from St. Petersburg to Koper. Traders wonder if this is an exceptional rate or a new bench­mark. SCUK general cargoes are fixing around EUR 11-12/mt on 3,000mt to ARAG. Owners are ready to dig in for the summer, hoping last-done rates stay as the lowest bar for new freights going forward.

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BMTI’s Continental Broker: Handy Bulk Viewpoint (30 May 2018)

The summer lull is spreading all over the Atlantic market with the exception of the Continent-Med area, which is still pretty stable with rates holding or even improving for some trades. Scrap charterers had to agree to US$ 12,500 daily on a 57,000 dwt ship for a trip to the East Med. The US$ 15,000 daily agreed on a TESS 58,000 last week for a front haul run is low in comparison, but finds its explanation in that the owners’ option for a front haul was next to non-existent and thus they had to bite the bullet. Fertilizer charterers were seeing tonnage of 55,000 dwt at US$ 11,000 daily for a trip to Nigeria.

Handysize tonnage is getting more expensive with owners of 33-36,000 dwt talking US$ 12,000 daily to the Mediterranean versus the charterers’ rate of US$ 10,000-10,500 daily. The Black Sea is still con­sidered by some players to be an okay market with 33-36,000 dwt fixable at US$ 7,500 daily for trips back to the Continent, which considering the sum­mer lull, is considered not bad at all. Front haul for Supras is still hovering around US$ 15,000 daily. A good number of early unfixed vessels remains the major issue in the NCSA-USG area. From WCSA, a major trading house decided to put in their own tonnage to cover a cargo to the Med for which spot market tonnage was offered at US$ 14-15,000 daily. Trading from the Brazil is hampered by the truck drivers’ strike. Cargoes are not getting in an out of the ports. Bunker supply is being affected as well. Thus, tonnage of 34,000 dwt has been traded at US$ 9,000-10,000 daily for a trip to the Continent-Med. Owners of a 57,000 dwt were talking US$ 13,000 daily plus US$ 300,000 BB for a trip to Chittagong, which is a true reflection of the market’s poor state.

The East is a rough patch for spot tonnage, with hardly any fixable cargo around. Clinker charterers were bidding 35,000 dwt tonnage US$ 8,500 daily for a trip to P.I., but decided instead to go for larger tonnage. Owners of a 35,000 dwt vessel failed to attract charterers at US$ 10,000 daily for 2-3 laden legs with spot delivery in China, and an owner of a 32,000 dwt vessel wants a rate of US$ 9,500 daily for a trip to Southeast Asia. Prospects seem to have improved for June loaders for which several cargoes have already been emerging and thus supporting owners’ stance not to back down yet.

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BMTI Bulker Market Viewpoint (23 May 2018)

Bulk CarrierA few indications of cargo rumblings in the UKC-Med on front hauls to the Far East are not enough to keep Capesize assessments from sliding to new lows of US$24,500 daily, losing almost US$ 3,000 on the first day of the week. Other rate losses aren’t quite as severe, but corrections have been coming hard and fast for owners who have little recourse but to accept terms that charterers are offering. Period charters are being more actively discussed with long term TCs going for mid-high teens of US$ 15-16,000 daily.

Derivatives traders note that Panamax FFAs for the Cal 19 contract are ‘technically bullish’ with levels approaching US$ 11,445, which would be over the 55-period average. Q3, meanwhile, is stuck in the US$11,615-11,880 range with little pressure on the top or the bottom budging levels. This is not dis­similar with what the physical market is doing at the moment, trending sideways amid very little market support, with traders mostly happy to agree to last-done levels when the odd offer arrives. Indonesia rounds remain prominent, at any rate, with Kamsar­maxes fixing over US$14,000 for Malaysia/S. China.

Handysize freights seem to be holding steady in the Atlantic despite a general lack of cargo demand and an over-tonnaged USG. Trips from the Continent to ECSA or USG and back, however, are still producing around US$ 7,500-8,000 daily on modern 28,000 dwt vessels, which is not great, but also not terrible for a functionally stagnant market. APS freights from the USG to UKC-Med via ECSA are fetching around US$ 12,000-12,500 daily on 42-46,000 dwt ships, but charterers are still applying pressure if possible.

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Pacific Basin Acquisition Reflects Appeal of Handysize Assets

Pacific Basin Handysize

Hong Kong-based dry bulk owner, Pacific Basin Shipping Limited, announced on Tuesday that it had signed a conditional agreement to acquire four secondhand or newbuilding bulk carriers at a com­bined value of US$ 88.5m. Fifty percent of the pur­chase would be funded by equity, said the owner. All four of the vessels—two Supramaxes and two Han­dysizes—are what would generally be called Handy bulk, comprising tonnage in the range of 64,000 dwt to 37,000 dwt. The largest, a 64,000 dwt, 2018-built Supramax would be purchased for US$ 28m and delivered in the middle of the year. The second Supramax, at 58,000 dwt, was built in 2010, pur­chased for US$ 15.5m and set for delivery in early 2019. The remaining two Handysizes are both of 37,000 dwt tonnage and log-fitted, one built in 2015 and one a 2018 newbuilding, both ships to be delivered in Q4 of this year, purchased at US$ 20.5m and US$ 24.5m, respectively. The three-year-old Handysize was already under long-term TC, which Pacific Basin said would replace its charter cost with ‘significantly’ lower operating costs. Earn­ings from new shares to be issued by the company would be applied to the purchase, said Pacific Basin. CEO Mats Berglund said the secondhand ships are consistent with the company’s target of acquiring good quality vessels at historically low prices. Pacific Basin, with an impressive fleet of 111 ships, is clear­ly no stranger to the dry bulk market. This purchase reflects a smart investment in arguably the best bulk carrier sector to acquire at the moment. Indeed, shipping market players say, anecdotally, that Han­dysizes are the best bang-for-buck in today’s S&P market. A recent poll by Splash­247 and MarPoll found, when presented with four promising vessel types—Handysizes, chemical tankers, small (sub 3,000 TEU) containerships and LPG carriers—nearly half of the over 300 respondents (43%) selec­ted the Handysize ship as the best asset play in 2018.

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May Day breather for the Capesizes (02 May 2018)

May Day holidays across much of the western world have taken a significant toll on the bulk carrier trade with meagre four fixtures have been available to report at midweek as market players take a break from the day-to-day bulker business. Capesizes, for their part, continue to trend downward, if the Baltic Exchange’s assessments are any indication. Conti­nental front hauls are possibly the most bearish run at the moment with more than US$ 500 off the assessment, following a few previous days of similar losses, threatening the UKC/CJK run with a level of US$ 31,000 daily before the week is through. TARV rates, meanwhile, slip to US$ 19,000 daily amid talk that US$ 18,000 daily has already been done. But who knows? Perhaps activity will bounce back yet this week when traders get back to business today.

Apart from a handful of Atlantic-based long hauls, Panamax business has stalled along with the rest of the bulker sector, leaving some of the positive mo­mentum gathered last week to fade slightly in the East. UKC-Med trips to South America and back are getting rates in the US$ 10,000 vicinity on Kamsar­max ships. Pacific-based sentiment is still moving in a positive direction, albeit very slowly. Pacific rounds are rumoured to have concluded US$ 11,000 daily.

Trends are solidly in place for the smaller bulkers as little in the way of change is perceived in the East or West as the month of May begins with anticipation. Indo rounds from South China to ECI are still mo­destly buoyant as US$ 11,000 daily is reached on the assessment for Tess 58 ships. Negative pressure, soft it may be, remains on the USG front hauls, which drift in the US$ 21-22,000 daily range on Ultramax ships with South China redel. Pacific rounds are fix­ing up to US$ 12,000 via Australia, but charterers have been having some luck with the US$ 11,000s.

Short Sea: Black Sea & Azov Markets Suffer from Reduced Inquiry and Sliding Rates (27 April 2018)

Black SeaTraders confirm that freights have fallen sharply on the sea-river-going trades with new grain demand having dried up rather suddenly and chaos reigns in some corners amid shifting seasonal patterns as well as rising uncertainty from trade hit by US sanctions. Others expect the weaker ruble to eventually boost trade from the region. Freights from Azov lost as much as US$ 2/mt over the past week as charterers continue to apply pressure to rates and (most) own­ers are more than happy to comply. Yeisk/Marmara rates have fallen into the lower US$ 20s/mt amid rumours that they are already in the high teens of US$ 18-19/mt. Most rates on this run, however, are still hovering in the range of US$ 22-24/mt, brokers say. Nikolayev/Marmara grain is flat at US$ 20/mt.

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Dry Bulk Market Viewpoint (18 April 2018)

CapesizeLouis Dreyfus made headlines this week, announc­ing they would be exiting the Capesize market due to its excessive volatility and control by mining groups to the detriment of owners. And it’s hard to argue with their rationale. With major trades in iron ore and coal increasingly dominated by mining in­terests in South America and Australia, owners see their influence waning apace. China’s consolidation of the global steel and iron trade will also centralize Capesize interests even further. As we have seen in recent years, Cape rates are continuous roller coaster of precipitous ups and downs that seemingly never stabilize into a solid trend. The bulk carrier market is nonetheless looking a bit rosier going forward. Louis Dreyfus will continue to trade in the smaller bulker sizes of Panamax on down, where global trade re­mains diversified and subject to outside market for­ces, including owners. As if to highlight this tone of volatility, Continental front hauls leapt more than US$ 2,000 at midweek, settling in low US$ 20,000s daily on ships of 180,000 dwt on Far East redelivery.

Enthusiasm about the Panamaxes seems to have been short-lived with the steam already having left the spot market and Pacific round voyages coming under renewed pressure with cargo activity again somewhat sluggish. Standard rounds in the eastern basin are again hovering just above or below the US$ 10,000 daily line, which shipowners find borderline unacceptable. Atlantic-based freight rates are looking comparatively more stable, but also besieged by overtonnage with the owners now relenting to APS deals more often than they would like to. UKC front hauls are somewhat steady in the US$ 18-19,000 daily range, owners of 76,000 dwt vessels report.

Volatility appears to be the province of the US Gulf with Supramax rates recovering there as fast as they declined just a few weeks ago. USG front hauls are already getting low-middle US$ 20,000s daily while trans-Atlantic trips to the UKC-Med are said to be fixing upwards of US$ 17,500 daily at US$ 2,000 higher than the assessment itself, which is already in the high US$ 15,000s. Pacific rates, meanwhile, are trending sideways, better than most markets can say, with Indonesia rounds routinely fixing in excess of US$ 11,000 daily on modern Ultramax tonnage.

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Short Sea: Bearish Sentiment Emerging (11 April 2018)

shortsea baltic westwardThe holiday hangover has lingered over the Baltic Sea and North Sea coaster markets in the past week with southbound freights from ECUK still getting around EUR 40/mt on scrap of 3,000mt into the Western Med, brokers say. The reverse trip north­ward, meanwhile, is lucky to fix anything higher than the lower EUR 20s/mt, we are told by several reliable sources, with high teens probably even more likely. Imports from the Russian Baltic to Ireland have been seeing solid business since the second quarter began with talk that up to EUR 33/mt has been secured on middle-range parcels of 5,000mt. General cargoes from the lower Baltic to ECUK are looking at about EUR 20-21/mt with 4-6,000mt agri-prods. Mineral cargoes of 5,000mt have report­edly fixed EUR 35/mt from the WCUK to Marmara, with pressure from charterers putting the same run closer to EUR 33/mt for end-April positions. The market seems to be generally caught in a sense of limbo with neither owners nor charterers showing much interest in provoking or seeking any major change from last-done, hoping that a stronger mar­ket drive comes about early May when ice conditions have receded completely. On the bearish side, some brokers note, there does seem to be more tonnage coming open than what is being concluded, indicat­ing that the near term could see more power in the hands of charterers than in weeks past. We shall get a better picture when the holiday haze finally passes.

Baltic Ice Report: Ice is drifting slowly eastward in the Bay of Bothnia, according to Baltic Sea Ice Ser­vices. In the northern Bay of Bothnia is 40-75cm thick fast ice in the archipelago. At the fast ice edge is 30-50cm thick ridged consolidated ice to southwest of Kemi 2 and to Oulu 1. From Kemi 1 west and further to south runs a lead. Farther out is first 10-25cm thick very close ice and then 25-50cm thick rafted and ridged ice. In the southern Bay of Bothnia is 30-55cm thick fast ice in the archipelago. Off the ice edge is a heavily ridged ice zone, very difficult to force. Farther out is 25-50cm thick ridged very close ice. Ice pressure occurs in the ice field. In the Quark is 20-40cm thick close and very close ice. South of Sydostbrotten is open water. In the Vaasa archipe­lago is 30-50cm thick fast ice to Ensten. Further on to Norra Gloppsten is 15-30cm thick level ice. In the north Sea of Bothnia is 25-45cm thick fast ice in the archipelago. In the south Sea of Bothnia is 15-40cm fast ice in the archipelago. Farther out is open water.

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Far East Handy Bulk: Week in Review (09 Apr 2018)

Far East SupramaxesLosses have been rather substantial in the eastern Handy bulk trades in the past week as the monthly switchover and widespread holidays gave charterers all the excuse they needed to get rates reduced to­ward their preferences. In the event, Supra NoPac rounds lost US$ 500 week-on-week to settle in the lower US$ 11,000s after trading high US$ 11,000s just a week earlier. Indonesia rounds, meanwhile, shed some US$ 300-500 over the week, putting the South China delivery and redelivery round in the high US$ 10,000s of about US$ 10,750 daily on tonnage of 58,000 dwt. Period chartering has been done, though intermittently, with short periods of six months getting US$ 13,000 daily on Handymax tonnage of 54-56,000 dwt from Southeast Asia.

Nickel ore business has remained fairly steady with 28,000 dwt ships getting up to US$ 12,000 daily on Indo rounds from CJK to China, brokers report. Grain rounds via NoPac have been securing around US$ 10,500-10,750 daily on ships of 38-42,000 dwt, we are told, with CJK delivery in mid-April. Handysize rates have had a bearish week, but not as harsh as among the Supras, with some US$ 100-150 down on average rates week-on-week, leaving No­Pac rounds at about US$ 9,250 daily on 36,000 dwt.

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Bulker shares in corrective week on Wall Street (6 Apr 2018)

Wall StreetPressure has remained on Capesize derivatives this week with May futures looking oversold, according to FIS analysts, who say the May-5TC spread is over­stretched at US$ 4,000. They warn upside moves will be more limited the longer that no type of not­able upward movement is seen in the indices. The Capesize index is still well in bearish territory, trad­ers observe, with technical resistance at US$ 9,304.

It was a corrective week for listed bulker companies on Wall Street with only a handful making any posi­tive gains. Indeed, with the exception of Eagle Bulk [EGLE], mounting a minor 1-2% week-on-week rise to US$ 4.9/share, most of the listed bulkers headed downward over the week. Most downgraded, argu­ably, was Navios Maritime Holdings [NM], shedding 13-14% over the week to settle at US$ 0.8/share. DryShips Inc. [DRYS] dropped 4% to US$3.5/share.

An exchange-traded fund for shipping futures was announced last week. The US-based Breakwave Dry Bulk Shipping ETF (BDRY) will be the first ex­change-traded product focused on freight futures in the dry bulk shipping market. BDRY is designed to use a so-called laddered strategy to purchase con­tracts while letting existing positions expire and settle in cash. The product will provide long expo­sure to dry bulk shipping using a portfolio of near-dated FFA contracts based on dry bulk indices. In essence, traders will be able to participate in the dry bulk derivatives market without having to trade the futures themselves, or so claims the fund, which has been created by a partnership between Breakwave Advisors and ETF Managers Group (ETFMG).

Following suit with the German and UK shipping banks, Italian shipping lender Banca Carige (based in Genoa) has put its portfolio for three shipping companies up for sale. The exposure of the three firms have an estimated combined value of US$ 750m and are loosely defined as ‘unlikely to pay’, a short step away from an official ‘non-performing’ designation. The loans, connected to Ignazio Messi­na & C., Finbeta and Scerni di Navigazione make up a share of shipping credit that the bank intends to offload before the end of the year. The value of Ignazio’s loans is estimated at about US$ 585m.

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BMTI Handy Bulk Viewpoint (26 Mar 2018)

From the Desk of a Continental Broker: The solidity of the markets’ performance is unques­tionable. Panamaxes are leading the way. Encourag­ingly, charterers continue to take tonnage from the East with a most recent peak of US$ 17,000 daily done from Mumbai area via ECSA to the East. Capers are less fortunate with rates declining. But talking in more general terms, sentiment remains unclouded. Off the Continent, scrap charterers were bidding a rate of US$ 14,500 daily for a 57,000 dwt on a trip to the East, which isn’t great, whilst ice-classed tonnage of 56-58,000 dwt vessel was being bid US$ 15,000 daily from Gibraltar via the Russian Baltic back to the Med, which is better. A Rouen/Algeria voyage for 30,000mt was rumoured as done at US$ 19/mt and equates to around US$ 10,500 daily in­cluding 450 miles of ballast to the loading port.


The Black Sea is short of Ultra-Supra vessels willing going east of Suez. But the rate structure is hardly affected with Supra tonnage worth around US$ 18-19,000 daily whilst Ultramaxes are worth around US$ 21-22,000 daily. The US Gulf is in a bit of a downward spiral. After a front haul trip on Ultramax tonnage was done at US$ 23,000 daily thence US$ 22,000 daily and US$ 20,500 daily respectively and now US$ 19,500 daily—which seems to have failed, however. A 58,000 dwt was booked at US$ 21,000 daily to WCSA, not good at all in comparison with earlier fixtures done. In line with it, Handies have also been dragged down with 32-34,000 dwt worth just about US$ 13-13,500 daily for a trip across the Atlantic or US$ 14,500 for the larger 36-38,000 dwt vessels, respectively Further, a trip to the West Coast pays around US$ 16-17,000 daily, depending on the vessel or whether charterers are jitterbugs.

In the ECSA, Ultramax tonnage has been in the limelight with Raffles surpassing everyone by book­ing an Ultra at US$ 15,750 daily plus US$ 575,000 BB to load sugar to the East. T/A rates for Supra tonnage are hovering at around US$ 17,500 daily whilst for front haul a rate of US$ 14,000 daily plus US$ 400,000 BB seems to have been agreed. In contrast, it has been very quiet on the Handy front. There appears to be no let up in the East where the owners of 28,000 dwt tonnage want US$ 10,500 for a trip from north China to India, or coal charterers rating a 37,000 dwt at US$ 10,000 daily for a quick 15-20 day employment ending Japan-Korea range.

The Red Sea has developed into the most intriguing market where every charterer risks to take a beating. Casillo has now increased its cargo size to 40-45,000mt, suiting an Ultramax-Supramax, but with the lack of tonnage in the area, the headaches to co­ver this cargo are unlikely to disappear soon.

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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.

bulk carrier

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.

BMTI Study: Shipping Technology Monitor 2018

BMTI’s Shipping Technology Monitor – 2018 *

In the study “Shipping Technology Monitor” BMTI presents a wide selection of its own coverage of today’s leading trends in ship design and propulsion, including many contributions from technology experts in their own sectors of the shipping economy who have shared their knowledge and opinions on the subject.

  • Green Shipping (essays about the future of shipping in a world of changing emissions standards)
  • Expected broking & economic trends from every sector
  • Ship Design (opinions and detailed accounts from industry thought leaders and ship designers)
  • Digitalisation (emerging technologies including Big Data, cryptocurrencies and online shipbroking)
  • Cybercrime (electronic threats to maritime security and new ways to guard against them)
  • Automation (robotics, drones, 3D printing and the promise of autonomous shipping)

E-Ship crosses the Panama Canal – (28-Feb-2018)

First ever transit of the “E-Ship”, managed by Auerbach [Hamburg] through the Panama Canal.
Auerbach is managing the E-Ship on behalf of the green energy wind-turbine manufacturer & windpark company, ENERCON in Germany!
The E-Ship 1 is a Flettner ship:
four large rotorsails that rise from its deck are rotated via a mechanical linkage to the ship’s propellers. The sails, or Flettner rotors, aid the ship’s propulsion by means of the Magnus effect – the perpendicular force that is exerted on a spinning body moving through a fluid stream.
Achievable propulsion savings by applying Flettner rotorsails are ranged between 35 .. 45 %.



.. looking at the Panmax market (22-Feb-2018)

The Panamax freight rates since  last week are on the start to continue on their southbound trail but with low demand of grains from Chinese buyers.
The trans-Atlantic market Indicates as well further slowing activity. ECSA sees a growing amount of ballasters coming in aiming to pick up grain trades for end February/begin of March. The Pacific round voyages are hovering between US$ 8,000-9,000 daily. Little amount of fixtures is seen during the first half of the week and this reflected in further slowing freight rates in both basins. Coal voyages from East Australia to China are talked in a range of US$ 11.30-11.40/mt. Trans-Atlantic rounds are hovering around US$ 9,500 daily

Western Panamaxes remain embattled [12-Feb-2018]

Atlantic Panamaxes stay in bearish mode
Panamax freights remain under pressure in the Atlantic with trans-Atlantic round voyages having fallen into the four-digit range of high US$ 9,000s daily on Continental delivery. (p. 1)

Improved revenues reported by Scorpio Bulkers
Scorpio Bulkers (listed on the NYSE under SALT) said its losses for the last quarter of 2017 were “lower than expected”, paying a dividend to investors, despite still having failed to turn a profit in the quarter. (p. 1)

Relative stability among Far East Handysizes
Handysize freights, while also under pressure, saw less pronounced declines in the past week with only about US$ 100-200 reduced on average freights, leaving the Aussie rounds to NoPac in the high US$ 6,000s on tonnage of 28,000 dwt. (p. 2)

BMTI’s Shipping Technology Monitor – 2018 *

In the Study »Shipping Technology Monitor« BMTI presents a wide selection of it’s own coverage of today’s leading trends in ship design and propulsion, including many contributions from technology experts in their own sectors of the shipping economy who have shared their knowledge and opinions on the subject.

  • Green Shipping (essays about the future of shipping in a world of changing emissions standards)
  • Expected broking & economic trends from every sector
  • Ship Design (opinions and detailed accounts from industry thought leaders and ship designers)
  • Digitalisation (emerging technologies including Big Data, cryptocurrencies and online shipbroking)
  • Cybercrime (electronic threats to maritime security and new ways to guard against them)
  • Automation (robotics, drones, 3D printing and the promise of autonomous shipping)

Biggest bulkers enjoy market revival (9 Feb 2018)

Strengthening surge in Capesize spot freightsCapesize vessel
A Capesize recovery is well underway—even if the smaller bulkers can’t say the same—with strong and uniform gains of US$ 1,000 day-on-day taking long hauls some US$ 3,000 higher over the week. (p. 1)

Fertilizer trips in play on UKC-Med delivery
Off of the Continent, fertilizer charterers are linked with a deal for 30,000mt to three ports USG-Mexico range in along the lines of around US$ 26-27/mt. (p. 1)

Global barley prices turning bullish
Tight supply of barley on world markets is expected to keep prices at high levels, analysts say, with malting and feed barley prices benefiting from a growing upside thanks to a combination of bullish forces. (p. 2)

…read more in today’s BMTI Daily Report.

Bulker market under correction (2 Feb 2018)

wavesThere are still convincing macroeconomic reasons to expect the eastern Capesizes to rebound in 2018, indeed to strengthen after Q2, including urgent coal demand to China (as domestic production continues to fall) and a general increase in mineral demand throughout the Far East. For the moment, however, the Capesize spot market is anything but bullish as charterers seem to have no problem withdrawing their business for the time being, even with the shift into February having little perceptible impact on sentiment. Front hauls are still in free fall with rates for trans-Atlantic round voyages plummeting before the weekend by nearly as much as US$ 2,000 to hit US$ 11,500-12,000 daily on modern 180,000 dwt units. Pacific rounds are quite bearish as well with rates in the low teens of US$ 12-12,500 daily after spending them in the mid-high teens just last week.

It’s hard to imagine Panamax voyages from ECSA to China were getting US$ 33/mt two weeks ago as they have tumbled to half of that—about US$ 14-15/mt—in the current market. Activity hasn’t fallen off completely; indeed, things remain lively enough. But cargo demand is still falling short of available ships, a recipe for correction. In the event, front haul trips have fallen into the low US$ 20,000s of US$ 21-22,000 with some owners already offering US$ 20,500. Period inquiry, nonetheless, remains strong.

It is the same story with Handy bulkers as charterers take advantage of an over-tonnaged market, hoping to push rates downward by keeping their cargoes under wraps. This has only come with mixed suc­cess, however, as Pacific rates have generally held steady or taken just minimal declines. Discounts are more pronounced in the Atlantic with USG delivery still falling (US$ 22,000 now on Supra front haul), but front hauls are holding on Continental delivery.

…read more in today’s BMTI Daily Report.

Far East Handymax/size – Week in Review (22 Jan 2018)

Far East Supramax ratesSlowly but surely activity has been creeping up in the eastern basin in recent days with owners seeing more room for securing better rates even as prevailing trends remain flat. Indonesia-based business has also gained momentum with S. China delivery to ECI now getting middle US$ 8,000s via Indonesia instead of the low US$ 8,000s range typical a week earlier. Rates for NoPac rounds have not changed significantly since the year began with owners still settling for just over US$ 8,000 in most cases. Back haul rates to the Continent are set to start increasing. Brokers report that Handysizes have been seeing more enquiry of late, which comes as some encouragement for owners who nonetheless have been settling for last-done rates since the start of the year. SE Asia trips to NoPac via W. Australia have been fixed up to US$ 7,500 daily on 28,000 dwt ships, owners say, with some seeking US$7,750. A 32,000 dwt vessel has done US$ 8,250 ex-CJK to N.China.

…read more in today’s BMTI Daily Report.