Category: Market Insights

October 16, 2024

Capesize rates have been under pressure this week as sentiment in China weighs heavily on the segment. Both oil and iron prices are also under pressure. The benchmark Brazil-China voyage fell to $23.96 per metric ton, well down from $26.95 about a week ago. Rates are down across all benchmark routes. The front haul route dropped $10,500 per day to about $44,300 daily, and the long round China Brazil/China has lost $6,000 per day in the past two weeks (currently $20,345 per day). Today’s FFA forward curve points to an October contract at $23,179 and a significant drop from $24,325 to $22,507 overnight for the November contract. The three-month Q4 contract is assessed at $23,157, down from $24,301 overnight. Look for a countertrend move in the coming days, and supply-side fundamentals favor the Cape size ship owner.

For Panamax, as for Capes, expectations for a robust Q3 failed to materialize. Since Chinese players returned to their desks after the Golden Week celebration, there has been no significant increase in sea-born activity. The Panamax Time Charter Average remains volatile. It touched bottom in early September at $11,500 per day. We saw an improvement to reach $14,000 daily by the end of September. Today, the time charter average drifts towards the $11,000 daily level again. Period rates have dropped significantly, as has the FFA market, with levels close to $13,000 for calendar 2025 and as low as $11,000 per day for the Calendar 2027 contracts.

We are experiencing a low activity level in Supramax vessels in the Atlantic. As limited vessels were available, rates improved on positional volatility on the US East Coast, and rates in the US Gulf saw a slight uptick. The South Atlantic market has been under pressure due to a higher building vessel count and a lack of demand for front-haul shipments. The market has progressed in Europe, with rates fixing higher than last. The Mediterranean/Black Sea region has been trading sideways, but there is optimism we could see a slight push as more charterers try to cover forward positions. The Pacific market has softened mainly due to the holidays in Asia. The vessel count continues to out-pace demand as many owners held off fixing their ships, hoping the market would have picked up after the holiday. North Pacific, round voyage rates, have been trending down while backhaul rates have been pushing up.

The Handy market in the Atlantic has been relatively flat over the past couple of weeks. The market had a slow start in the US Gulf as the US and Canada celebrated holidays on Monday. Looking at the South Atlantic, Handy size has been more cautiously optimistic. Forecasts show a balance in supply/demand curves between ships / open cargoes over the next few weeks. Oversupply of ships in the North Atlantic area has caused ships to ballast out or take cargo via the US East Coast basis delivery at the load port. The Pacific is coming off the Golden Week holidays in China. It has been a slow start so far, and expectations are it will need a fresh influx of cargo to increase rates. Operators and grain houses are still looking for longer-period deals; we could see some Head owners fix their ships out to get coverage over January and Chinese New Year instead of playing the spot market at less exciting rates.

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October 9, 2024

Market Overview:
Holidays in Asia weighed heavily on market activity last week, giving us a generally quiet week. Today we continue in a similar vein. Bunker prices have moved up in the past week. West Texas Intermediate crude oil futures rose by about 10% last week, due to concerns about potential supply disruptions in the Middle East, particularly in reaction to tensions involving Iran and Israel. Iron ore prices have recovered in the past week, driven by China’s economic stimulus measures. The Baltic Exchange forward freight assessment is indicating a 12% and 19% increase in Panamax Time Charter average in October and November, respectively, as compared to today’s spot rate. The assessments for all segments are calling for improvements this month and next. Please see our daily Time Charter Averages report for more information.

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October 4, 2024

The market at present is lackluster and in need of a catalyst to break the current range bound trade and general lack of volatility. Perhaps the commencement of the North American grain export season and grain demand in north Europe might provide some much-needed impetus in the Atlantic and China’s return from this week’s national day celebrations on the heels of one of government’s most significant fiscal and monetary policy stimulus moves since the pandemic will drive economic recovery in the coming months?

According to the USDA’s projections, there will be increased exports of key grains such as corn, sorghum, and rice. Despite a slight decline in planted acreage for some crops, the overall demand and competitive global markets are expected to drive substantial export volumes.

In China, the stimulus measures have surged investments in infrastructure and property and are expected to drive GDP growth and rebound China’s economy.

Much of the market weakness, as was anticipated in this report earlier this spring, is due to a resumption of Panama Canal transits over the past few months.

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October 1, 2024

Market overview:
We start the week on a quiet note with the North American market returning to work after last week’s ASBA gathering in Miami, the east coast assesses the damage from Hurricane Helene’s severe flooding and power outages and the potential for a walk out tonight at midnight by the union representing dock workers ( International Longshoreman’s Association), whose strike could shut down ports along the east and gulf coasts (Maine to Texas) and potentially affecting about half of the nation’s ocean imports. The current contract expires at midnight tonight.

Broker team estimates and Historical Data:
Please refer to the below chart, which illustrates our broker team estimates for commodity specific trade lanes and the historical range they have traded in the past year.

Market Outlook:
Positional volatility remains the name of the game as supply and demand is balanced, and rates for now trade within a narrow range in all segments.

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September 23, 2024

Market Overview:
We start the week on a positive note, albeit continuing the relatively flat/narrow range trading from last week.

Broker Team Estimates and Historical Data:
Please refer to the below chart, which illustrates our broker team estimates for commodity specific trade lanes and the historical range they have traded in the past year.

Market Outlook:
The fall season has arrived in the northern hemisphere, and the market is cautiously optimistic, positional volatility remains a concern, while rates for now trade within a narrow range in all segments.

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September 18, 2024

Market Overview:
We start the week on a positive note, while last week, all markets traded down, each within a very narrow range.

Broker Team Estimates and Historical Data:
Please refer to the chart below, which illustrates our broker team estimates for commodity-specific trade lanes and the historical range they have traded in the past year.

Market Outlook:
The market is more optimistic this week, with the expectation of a lowering of interest rates in America.

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September 11, 2024

The story of the Capesize market this year and this summer has been strong supply-side fundamentals. The daily average of the time charter routes has peaked twice in recent months – $29,365 in early May and $32,250 in early July – we today stand at about $28,000. The largest bulkers have enjoyed a volatile summer in June and July and a strong run-up since the start of August. Vessel owners are bullish on the Cape sector.

Over the summer months, the Panamax market has seen a fair amount of volatility; the time charter average rates have picked up in mid-June at $17,700, dropped to $13,700 the first half of July, partially recouped by the end of July, reaching $16,200, and finally slide down to the current $11,500.

The Supra/Ultra market has traded within a narrow range across the summer months. Positional volatility reigns supreme. Similar to the Panamax market, the Pacific Basin is where the action has been this summer. There is optimism amongst owners that the levels have hit bottom and there should be a spike in the near term that will carry through Q4.

The Handy market has had a relatively strong summer. As the weeks went by, expectations of the usual summer lull kept getting pushed back, and only toward the second half of August did we start to see a slowdown. However, the market has rebounded overall rather quickly, and this week, there was optimism throughout the globe. The freight futures forward assessment signals some optimism, and the period inquiry is strong as a result.

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September 10, 2024

Market Overview:
Post summer season and the market traded within a very narrow range this past week. The trend continued with the Cape size was showing strength. Note Panamax rounds in the Pacific have reached almost double those for a transatlantic round.

Current Market Conditions:
A quiet start to the week. Notably, since Friday, rates have stabilized.

Broker Estimates and Historical Data:
Please refer to the chart below, which illustrates our current broker estimates and the historical range in commodity-specific benchmark trade lanes.

Market Outlook:
As we approach the commencement of the northern hemisphere grain season, and potential realization of lower interest rates and Panama Canal returning to normal transit capacities, we anticipate increased positional volatility. This market continues to be influenced by several factors, including, ongoing going wars in Ukraine and Gaza, diversions of Red Sea traffic via the cape by the Houthis, and the convergence of Panamax and Supramax daily rates. Add this week, the tropical storm hitting the USG.

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August 28, 2024

Market Overview:
The end of the summer season and the market traded within a very narrow range.

Current Market Conditions:
A quiet start to the week. Notably, since Friday, rates have fallen further across all sectors.

Broker Estimates and Historical Data:
Please refer to the chart below, which illustrates our current broker estimates and the historical range in commodity-specific benchmark trade lanes.

Market Outlook:
As we approach the end of the summer season, the commencement of the northern hemisphere grain season, and the potential realization of lower interest rates, we anticipate increased positional volatility. This is influenced by several factors, including further improvements in the Panama Canal, ongoing diversions of Red Sea traffic via the cape by the Houthis, and the convergence of Panamax and Supramax daily rates.

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August 20, 2024

Market Overview:
Aside from Capesize vessels, which demonstrated strong performance this week, the market traded within a very narrow range.

Current Market Conditions:
Today marks a quiet start to the week. Notably, since Friday, Panamax daily rates have fallen below those of Supramax vessels.

Broker Estimates and Historical Data:
Please refer to the chart below, which illustrates our current broker estimates and the historical range in commodity-specific benchmark trade lanes.

Market Outlook:
As we approach the commencement of the northern hemisphere grain season, anticipate increased positional volatility. This is influenced by several factors, including improvements in the Panama Canal, ongoing diversions of Red Sea traffic via the cape by the Houthis, and the convergence of Panamax and Supramax daily rates.

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