BMTI Handy Bulk Market Update (24 Feb 2021)

Quo vadis, market? To throttle the climbing speed to new heights in rate levels is badly needed! This said, grain traders are pointing to the upcoming season in ECSA, wherefore many trading houses keep hedging themselves by booking fairly regularly Kamsarmax tonnage in the East, at now beyond US$ 20,000 daily. Thus it cannot be ruled out that there will be no throttle, but the market certainly will reach a ceiling, which to predict does not appear possible right now. Grain traders seem to believe in a strong, for them unpalatable market. For April shipment they have seen number of around US$ 40/mt for 25000/10 wheat from Black Sea, or US$ 20-22,000 daily from owners, which they consider realistic.

A bit of gossip has been spreading: operators, a few weeks ago, booking a Handysize cargo from Brazil to the Baltic, when they entered the market for tonnage were seeing slightly cheaper than the rate they had agreed with the charterers, but refused to fix that vessel, since the profit margin of US$ 1/mt was too low. They wanted to make more money and were punished by an escalating market with the cheapest rate available US$ 15/mt beyond their agreed num¬ber. Either these people did not follow the market properly or did not want to listen to the warning voices of their brokers. They have to swallow a dif¬ference of likely US$ 500,000 for this shipment.

There is another important aspect to consider for all charterers with still cheap tonnage on for long term periods to pay to hire extremely punctually, to stop owners from applying the anti-technicality clause, giving them no lever to escape from the cheap char¬ter, and to seek more attractive employment instead. The chartering market remains in full swing, whilst off the UKC-Baltic range brokers believe in a soft¬ening market for Ultramaxes and Supramaxes. Baltic rounds for Supramaxes they expect to drop below US$ 19,000 daily and, even for Ultramax tonnage, scrap charterers feel inclined to reduce their numbers for a trip to East Mediterranean to US$ 20,000 daily. Also Kamsarmax brokers report of owners becoming more realistic in terms of money. The number of available cargoes in the Atlantic is said to be limited. Grain traders dropped a 38,000 dwt at US$ 29,000 daily for a trip to cover Rouen/Algeria. In the Medi¬terranean, an Ultramax was taken to the UKC area at US$ 21,000 daily. Vessels of 28,000 dwt have been fixed from the East Med to the Continent at US$ 18,500 daily. For a trip to the US Gulf, the owners want the same money for a trip to the US Gulf.

From Senegal to the Continent-Baltic range a 34,000 dwt was taken at US$ 14,000 daily. The USG is blo¬ssoming for Handysizes. Rates seem unstoppable. After a 36,000 dwt was fixed at US$ 20,000 daily for inter-Caribbean trading, the rate now stands at US$ 22,000 daily. Also the US$ 30,000 daily last week conceded to owners of a 37,000 dwt for a trip to WCCA has now risen to US$ 35,000 daily. From the Red Sea area, a 34,000 dwt ship was fixed to the Continent at US$ 14,500-15,000 daily. Owners of a 36,000 dwt want US$ 17,000 daily for 4-6 months of trading, instead of booking a single trip to India or the eastern trade areas. Crazy numbers have been reported from PG where Ultramax owners would like US$ 38,000 daily for a trip to Bangladesh. Handysize tonnage of 32-37,000 dwt is not avail¬able below US$ 20-25,000 for trips to India-China range. Fertilizer charterers took a 56,000 dwt at US$ 23,000 daily to Australia. Even for an Indian coastal trade from the WCI to ECI-Bangladesh a 50,000 dwt was conceded a nice US$ 25,000 daily—what more?

In the flourishing East owners of a 56,000 dwt want US$ 20,000 daily for a CIS RV with delivery and redelivery Japan. For back haul business, the owners of a 28,000 dwt have come up with a moderate US$ 7,000 daily for a trip from Penang to the Continent.

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