Handy Bulk Market Update (10 June 2020)

handymax bulkerTrying to analyse the worldwide chartering market, you cannot but conclude, that the East is hugely outperforming the Atlantic. This does not mean that every owner is keen to go there, and rather keep staying in the Atlantic. Were there to be a rush to the East, the pendulum after a while would be swinging back. A widely spread rush of tonnage to the East may lead to an oversupply there dragging rates down whilst in the Atlantic the reduced number of ships may spark a significant improvement of rates in the area. In any case, despite the East being the better area, premium rates are still being paid for going there, numbers nothing near obtainable in the Atlantic.

On the background of Chinese insatiable appetite for raw materials and other goods to improve the living standards of its people, the present trend may well endure for a while. Given the trade war background between China and the US, exports from the United States are not as much welcomed any longer. These sources can easily be replaced, even within the East. With any substantial change in trading patterns, shipping will inevitably have to follow suit. Mind you, the world is changing, accelerated by corona.

Actual market activity in the Atlantic is insufficient for the owners to stand tall. Scrap charterers keep rating Ultramaxes for a trip off the Continent to the East Med in the middle US$ 6,000 daily. Fertilizer charterers were getting in tonnage at US$ 17.5/mt for 28,000mt from the Netherlands to the Plate. Tonnage of 34,000 dwt has been traded in the low US$ 10,000s daily into Southeast Asia and around US$ 11-12,000 daily to Bangladesh, respectively.

Rouen to Morocco was covered on a 35,000 dwt at around US$ 5,750 daily. Period rates for 58,000 dwt have been exchanged at around US$ 9,250 daily plus US$ 300,000 for worldwide redel for 12 months of trading. From the West Med, Ultra tonnage has been traded for a straight trip to China in the low US$ 13,000s daily. For a 15-day trading within the Black Sea 35,000 dwt tonnage as proposed at US$ 3,000 daily. Ultramax tonnage was covered at US$ 13,500 daily from Canakkale via Black Sea to the East. US$ 10,000 daily has been the rate on a 38,000 dwt for a trip from the East Med to India. West Africa has been reaping the benefits from the bullish South African area with a 46,000 dwt bid US$ 12,500 daily for a trip via Brazil to the East. From the PG, the rate for 30,000mt of fertilizers from PG to South Africa have risen from US$ 12/mt of early May to US$ 20/mt now, a corollary of rising demand in that area.

In the buoyant East, charterers seem to be getting increasingly nervous, anxiously waiting for owners to reply to their offers. Ultramaxes have been offered from China for a South African round voyage at rates of around US$ 10,000 daily. For NoPac rounds char¬terers have raised their numbers from US$ 7,000 to US$ 8,000 daily versus owners’ rate of US$ 10,000 daily. Back haul charterers from Australia have been facing numbers just below US$ 4,000 daily for a trip to Europe with delivery in Singapore.

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