Coal news and updates

Dry bulk rates keep on falling

The dry bulk market nowadays is in an endless downward spiral, which as it turns out is unable to recover, at least as long as the current balance of demand/supply is maintained. Yesterday, the industry’s benchmark, the Baltic Dry Index (BDI) was down yet again, losing 12 points or 2,2% to 534 points. The Capesize index fell 33 points, or 3.85 percent, to 824 points as average daily earnings for Capesize vessels fell $305 to $7,181. The Panamax Index, dropped four points, or 0.97 percent, to 408 points. Average daily earnings for Panamaxes fell $37 to $3,258. Finally, among smaller vessels, the Handysize index dropped one point to 285 points, and the Supramax index fell five points to 455 points.

Commenting on the Capesize market, in its latest weekly report, shipbroker Fearnley’s noted that “there is a steady supply of cargoes out of West Australia but despite of this, rates are getting softer. Present level is just above usd 4 pmt. Fixing activity out of Brazil is getting less, with more talks than real action. The level remains steady on this trade and the big question is when Vale will be done for this year. Atlantic in general is well balanced, with a time charter level for a transatlantic round close to USD 9,000 daily”.

On the Panamax market, Fearnley’s noted that “the segment is in a steady decline with reduced activity across the board. It has been an extremely quiet week for the Panamaxes in both hemispheres and rates keep on dropping to all time low levels. Transatlantaic business is scarce with most rounds bss APS only in the 6000-7000 range with no BB. Voyage levels are under pressure, and USG fronthaul under 22 for spot and < 19 forward. ECSA business not a safe heaven for ballasters, with APS levels in the 6 + 150 GBB range. Far East is in the dark doldrums with levels APS 3 + 30 for Indo ronds and 4 + 125 for NOPAC. The forward curve is flat and in the mid 5’s for Cal -16, and owners are willing to fix at even less for about 1 year”.

Finally, on the Handy markets, the shipbroker said that it was another lackluster week for the segment. “The average rates keep falling to the tune of abt USD 100 per week. The period market remains thin, but there are some Ultramax owners willing to cover in the USD 6000’s level for abt a year. There is some anticipation relating to the lifting of some export taxes in Argentina, but it is uncertain how big an effect this will have on the market. There have been some COA’s concluded in the last week and owners are not asking for premiums going through 2016, indicating a definite lack of confidence for the upcoming year”, Fearnley’s concluded.

It’s worth noting that among the factors contributing to the fall of dry bulk freight rates is the fact that congestion at most Chinese ports has eased further over the past week due to a general improvement of the weather. Dense fog, strong winds, heavy rain and snow made several China ports close from time to time since late November. In a report, Platts said that “Shanghai, Bayuquan, Qingdao had cleared their backlog of ships, and waiting time for a Capesize vessel to berth was one to three days compared to two to five days earlier. Delays at Jingtang fell by one day, with Capesize vessels currently waiting five days. The port closed Wednesday afternoon at 1400 hours China time (0600 GMT) due to dense fog. But Caofeidian and Tianjin ports were still seeing Capesize vessels waiting ten days for a berth, with both ports closed intermittently over the past week due to dense fog. For Caofeidian, this represented an increase of five days from a week ago. Tonnage supply has risen over the past week, sources said, with owners eagerly offering their vessels in the Pacific region”, it concluded.

source: http://coalspot.com