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May 30th 2014 Week 22
HIGHLIGHTS
Capesize: A firming
market is pushing
rates upward
Panamax: Increasing
number of grain car-
goes out of US
L&S INDEX OF DRY
BULK STOCKS*
Due to somewhat higher de-mand for iron ore and coal, we have seen a firming Cape mar-ket with West Australia/ Qing-dao rates pushing above US$8/Mt for the first time in a while. The transatlantic market has seen improved activity with much of the spot/prompt ton-nage fixed. The front haul mar-ket keeps edging upwards, and charterers are aiming at US$ 19.25/Mt. Towards the end of the week rates in the Pacific surged even more, and the highest reported fixture was reported at US$8.85/Mt. Not too much action for period rates, 1 year TC was said to be fixed at US$20,500/day with early delivery in Brazil.
At the beginning of the week there was still oversupply of tonnage and not enough fresh enquiries to boost the rates in the Pacific. Rates for US Gulf/ Far East remained unchanged, likewise for East Coast South Australia. Owners willing to take the trip at this moment are still able to hold out for slightly higher rates, and wait for the activity from US Gulf to pick up. Mid- week, we started to see better sentiment in the market, more US grain cargoes started to fill the market for September and stimulated owners to increase their rates from approximately US$41.5/Mt up to US$43-44/Mt. This could tempt owners to switch their focus away from transat-lantic onto front haul voyag-es. We have seen more DOP fixing in the East this week, although there is not enough
volume to exclude the APS market. The East Coast South Australia market also firmed towards the week-end.
Both Handymax and Supramax markets continued to move upwards last week with gains across the board. Although rates in the Pacific finished higher at the close of the week, rates are still on the low side, with a lot of tonnage available in the South East Asia region. Activity in the Atlantic contin-ued to increase, and is ex-pected to continue with the US Gulf market on the rise and the coming grain season in the Black Sea upon us. With the winding down of summer holi-days we expect to see contin-ued improvement in both ba-sins.
Week 33
CAPESIZE PANAMAX
SUPRAMAX/HANDY
-Shipbrokers and consultants since 1919-
Weekly Dry Bulk Report
0
20,000
40,000
60,000
80,000
100,000
120,000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
US$/day Capesize Timecharter Average (TCA)
5 Yr Low 5 Yr High 5 Yr Avg 2014 Ytd
2
2
Iron Ore
-Shipbrokers and consultants since 1919-
Oversupply in coal market
can mean fourth quarter
seasonal demand has less
effect on prices than usual
Spot iron ore prices sat at
US$93.40/ton by week’s end,
down from US$95.30/ton at
the beginning of the week.
The closing price was still up
from midweek lows. The iron
ore price has slumped by 31
per cent from US$135/ton at
the beginning of the year.
The average price for the
year this far is US$108.40/
ton, should this be indicative
of developments for the re-
mainder of 2014, iron ore
producers would take a
US$18 bn hit to revenues.
Iron ore futures in China fell
to a two-week low last week,
reflecting an oversupplied
market where demand from
the Chinese steel-industry is
growing at a lower rate than
previously. Cash and credit
restrictions in the Chinese
property market seem to be
keeping the steel-making
industry from undertaking a
major restocking of iron ore
at the moment. Chinese trad-
ers cut their offers for iron
ore cargoes stocked at port
by 5-10 Yuan/ton last week,
according to the Steel Index.
Australia’s BC Iron ltd. has
completed a deal to buy Iron
Ore Holdings ltd. with a com-
bination of cash and stocks
totaling US$233 million. The
transaction will create a new
midsize producer in Western
Australia’s Pilbara region,
which produces more than
half of the world’s iron ore
for seaborne trade. (Sources:
WSJ, Reuters)
Coal
Grain
Low thermal coal prices are
reflecting the oversupply
and weak demand in the
current market. Some play-
ers argue that the market is
set to balance itself, leading
to an increase in prices in
the coming year citing that
falling investment in new
production in Australia and
Indonesia is likely to create
less supply. The plentiful
supplies might however be
in volumes enough to offset
a price gain from increased
seasonal demand as the
Western Hemisphere moves
into the winter months,
causing price levels to gain
less momentum than usual.
Prices increased by 8.1 per
cent in the same period in
2013, and 7.6 percent in
2012.
Takeover in Australia as
BC Iron ltd. buys Iron Ore
Holding ltd.
Wheat crops in France, EU’s
top wheat exporter and the
benchmark for Western Eu-
rope prices, have been se-
verely affected by heavy
rains this summer, and the
country’s exports are set to
remain predominantly within
the EU trading area for the
first time in seven years.
French exporters are increas-
ingly turning to feedstock
traders in the region as large
crop volumes are rated at a
lower quality than that de-
manded by large importers in
the Middle East and North
Africa. Ukraine’s grain ex-
ports were reported to be up
by 60 per cent to 2.7 million
tons in the past five weeks, a
multi-year record. A weaker
credit market as a result of
the current crisis has caused
farmers to increase sales to
cover cost of planting and
sowing preparations.
3
3
-Shipbrokers and consultants since 1919-
Rates by Routes
Timecharter Average
4
4
-Shipbrokers and consultants since 1919-
*Basket of stocks for L&S Index on page 1 includes: Golden Ocean Group Ltd., Western Bulk ASA, Scorpio Bulkers Inc., Paragon Shipping
Inc., Baltic Trading Ltd., Diana Shipping Inc., DryShips Inc., Safe Bulkers Inc., and Star Bulk Carriers Corp.
The Baltic Exchange Dry Index Last Week This Week Trend
Weekly Baltic Average C5 (US$/pmt) 7.60 8.34 Firming
Weekly Baltic Average C3 (US$/pmt) 18.64 20.50 Firming
Weekly Baltic Average H4 (US$/day) 6,627 6,941 Firming
Weekly Baltic Average P3A IV (US$/pmt) 11.44 11.72 Firming
Weekly BDI Average 762 891 Firming
FFA Last Week This Week Trend
Capesize (C3+2Q) (US$/day) 19,127 19,800 Firming
Panamax (P1EA+2Q) (US$/day) 8,810 9,623 Firming
Supramax (5TC_S+2Q) (US$/day) 9,545 10,481 Firming
Bunker Prices Last Week This Week Trend
Rotterdam IFO 380 (US$/pmt) 567 566 Softening
Rotterdam MGO (US$/pmt) 854 859 Firming
Singapore IFO 380 (US$/pmt) 598 592 Softening
Singapore MGO (US$/pmt) 873 882 Firming
5
5
Dry Cargo Offices
Office Name Telephone number E-mail
Athens
Lars Juul Jørgensen +30 6948 364 642 [email protected]
Tony Westbrook +30 6947 401 636 [email protected]
Chris Allen +30 6951 666 788 [email protected]
Singapore
Mehmet Burak Ughur +65 6349 8400 [email protected]
Ertugrul Erdem +65 6714 1015 [email protected]
Pierre Lambert +65 6348 8403 [email protected]
Nicolas Lamoine +65 6349 8400 [email protected]
Daan Van Velzen +65 6349 8402 [email protected]
Ella Tang +65 6349 8419 [email protected]
Sebastian Bull Øvrevik +65 6349 8411 [email protected]
Erling Lystad +65 6349 8420 [email protected]
Ivan Andrade +65 9383 7125 [email protected]
Ulas Durali +65 6349 8415 [email protected]
Jiajun Wang +65 6349 8417 [email protected]
Eystein Lyche +65 6349 8407 [email protected]
Parijat Mishra +65 6349 8406 [email protected]
Kwai Leng Seetoh +65 6349 8401 [email protected]
Shanghai
Einar Karlsen +86 21 6391 5663 [email protected]
Joseph Wang +86 21 6391 5595 [email protected]
Nick Chen +86 21 6391 5768 [email protected]
Yajie Luo (Jessica) +86 21 6391 5553 [email protected]
Wenyan Zhang (Kelvin) +86 21 6391 5552 [email protected]
Richard Brayshaw +86 21 6391 5878 [email protected]
New York
Nicholas Tangney +1 212 684 2503 [email protected]
Robert B. Tangney +1 914 244 1006 [email protected]
Michael Perry +1 212 684 2505 [email protected]
Research
Knut Stangebye Olsen +47 22 52 77 03 [email protected]
Silje Elise Lien +47 22 52 77 14 [email protected]
Marthe Lamp Sandvik +47 22 52 77 00 [email protected]
Operation Michael Hansson +47 22 52 77 23 [email protected]
