Hellenic Shipping News reported that the dry bulk market's demise has failed to turn around so far this week, with the industry’s benchmark, the Baltic Dry Index, fell for the 20th consecutive day, now standing at 2,515 points, which is the longest negative series since April of 2009.
It's also the lowest point of the market since early October last year. This time around, the fall has impacted almost all ship types, with the capsize market once again finding itself earning lower daily rates than the smaller in size Panamax segment. Daily rates for capsizes are now at USD 24,064, with the trend predicted even lower. By contrast, some dynamics evolved in the Panamax market, with the Baltic's Panamax Index rising by 45 points to 3,062 (versus 2,698 of the Capsize Index).
According to Commodore's weekly report, "Chartering activity was subdued as Chinese players were away from the market celebrating the three days Dragon Boat Festival which began on Monday. Market sentiment has remained negative due to the growing fear of an approaching slowdown in Chinese real estate construction; this fear has intensified as Chinese steel mills have announced temporary cuts in steel output in order to reverse falling prices. Spot iron ore demand, however, remained firm throughout last week. 23 vessels were reportedly fixed to export iron ore, only 2 less than the previous week. In addition, overall spot chartering activity increased at the end the week after Chinese players returned from the holiday."
Commenting on the capsize market in its latest report, shipbroker Fearnley's said that these are challenging times for the biggest ships as spot demand presently not matching flow of early units.
The report said that "The Atlantic is struggling in particular, as front haul cargoes for July dates are few and far between. Ballasters from Far East are plentiful, and consequently the Tubarao/Qingdao conference trade has fallen by USD 3.50 pmt to USD 14,000 per day to present USD 37,000. The Western Australia China trade is on a similar track, with daily earnings for Pacific rounds cut by more than 30% to come in at below USD 20,000. Although no sign of recovery is evident, numerous major players are considering present levels temporary and thus willing cough up to almost 50% hire premiums for tonnage willing short period."
Mr Georgi Slavov head of dry freight research at ICAP Shipping said that "We remain bearish especially on the capes for the next month or two. After that, I do expect again a revival of activity. We may see for a prolonged period of time later on this year and especially next year capes trading below Panamax. Capsizes will be under pressure."
Commodore noted that "Chinese steel mills have produced 269.4 million tonnes of crude steel in the first five months of 2010, an increase of 52.36 million tonnes (24%) from the 217.04 million tonnes of crude steel produced in the first five months of 2009."
(Sourced from www.hellenicshippingnews.com)
