With the Dry Bulk Index posting a healthy number of consecutive upward sessions, optimism seems to be returning at the dry bulk shipping sector, which has been plagued by the sharpest rate fall in its history.
On Tuesday, the BDI reached 911 points up by 22 since the previous session. It is now at its highest point since October of 2008 and the owners of capsizes can finally have something to smile or at least grim about.
The main reason for the BDI’s rise is the Capesize sector, the reference point of the market. The relative index the BCI (Baltic Capesize Index) continued its upward trend ending the session up by 76 points at 1864. The daily average time charter for a capesize is now at USD 15,235, up by USD 1,105 from the day before. This level is even enough for some ships to return some modest profits to their owners, for the first time in months.
The same can’t be said for the rest of the market and ship types. Panamax activity isn’t enough to cause a rebound in rates. The Panamax Index posted another fall by nine points to end at a mere 520 points. This level produces an average time charter rate of $4,136, lower than the USD 4,208 earned by supramaxes. At a similar pace, handysize activity is stalled for days, with the relative index now standing at 270 points. The average daily charter is a mere USD 3,976.
In its weekly report on the dry bulk market, shipbroker Barry Rogliano Salles observed that “smaller bulk carriers are still sticking to floor levels, despite some more trading on the grain front. BRS noted that the shorter list of prompt vessels in the Atlantic has lifted the rate further on front haul and transatlantic routes, while in the East the miners are fishing vessels for their own needs. Period business remains limited but recent deals confirm that rates in the low USD 20,000s’ can be achieved for a modern Cape on a one year commitment.
A different picture is painted in the panamax sector, where as BRS points out a front haul grain activity largely from the US Gulf against very limited fresh enquiry in the East. But it predicts that “there’s a large spread between Cape and Panamax at the moment but the spread has to close; with limited fresh activity this week, one would expect the Panamax to stop increasing until a more sustainable fundamental change occurs”.
As for the even smaller types of vessels, it is evident that the market has reached its floor and can only go up from these levels. It’s only a question of when. For the moment though, business is still slow to emerge and there is no clear sign of a market heading up. Pacific rounds for Supramax are still hovering below the USD 5,000s’, pretty much the same for Atlantic rounds. India seems stalling a bit after a few weeks of rally. Trips to china are being fixed in the region of USD 10,000 depending on vessel’s specs.