The price hikes may be spurred China’s pledge in the 19th National Congress to wipe out poverty by 2020. Thus, this meant that the country will need to achieve at least 6.5% yearly growth toward 2020 to make this goal feasible.
Besides, the BDI is in the seasonal high shipping cycle where vessels were fixed before the year-end, as such commodities like iron ore shipments are scheduled much earlier before winter. Thus, capesize rates began the week strong, only to falter later on mixed iron ore outlook. Furthermore, the ongoing the coal conference held in Barcelona, had also taken a significant numbers of traders off the market.
At first, the absence of the traders attending the Coaltrans did not seem to stop the stop the buying enthusiasm from those remaining. As the early physical news produced talk of 8.50 and 8.65 fixing which was shortly followed up by rumors of Spartacus fixing for short Pac round at $25,750- $26,000 on Monday. However, things soon took a turn for worse as the week dragged on.
“After a strong day yesterday which saw the index touch a near three year high, capesizes had a change of fortunes on Wednesday.” said a FIS FFA broker.
As a result, he noted that the index retraced a touch and prompt paper came under some pressure as the afternoon progressed. Then, C5 was reported to have fixed 8.20 & 8.15 early on while Atlantic news was distinctly lacking with capesize 5 Time Charter Average recorded at $22,228, down $287 at day-on-day basis.
Likewise, Panamax rates also hit a downtrend after a lethargic opening at the start of the week. The Panamax time charter average posted $12,816 on Wednesday, down $275 day-on-day and a loss of $401 as compared to Monday’s rate at $13,217.
“Nov and Dec fall sharply averaging $400 plunging lows at $12,500 and $11,800 respectively while further out cal18 slipped off to post $9,700 several times,” said a FIS panamax shipbroker.
“The tone remains cautious with bids continuing to thin out towards the close,” he concluded later.
Supramax rates were then caught up in a yo-yo session, as the market continued to sit in the range that was witnessed at the close of last week. As such, the supramax time charter average posted at $11,872 on Wednesday, down $19 day-on-day but unchanged on the similar level seen on Monday.
“Supramax paper softened once again as we really lacked bid support with rates slipping throughout Wednesday,” noted an Asia-based FIS shipbroker.
According to him, the index stepped back into negative territory by mid-week as 10TC was -$23 and 6TC -$19, while Q234 package was sold $9,600 and the Cal 18 $9,650. In the meantime, some small gains were seen in handysize as the Handy size Time Charter Average hiked to $10,104 on Wednesday as compared to $10,012 recorded on Monday.
With downtrend seen across the dry bulk rates, one wonders if the BDI can continue to push for further height again. However, the freight rates are still in the strong position currently with the support of the commodities prices rally. Perhaps, the market may see another upswing with the return of the traders from the Coaltrans conference.