Much like the England squad that crashed out the World Cup Final after a loss to Croatia, the Capesize market showed similar forward momentum in pressing for higher rates last week and surpassing all expectations only to throw it away in a market correction.
“With the paper market already in backwardation, the sellers were reluctant to aggressively chase the bid lower with the July contract trading to a low of $20,000 on Monday, down $350 day-on-day,” said a FIS shipbroker.
Then on Tuesday, the Capesize paper market slipped further where Capsize 5 time charter average dropped by $1,701 day-on-day to $22,122, as compared to $23,823 on Monday. The rates could have fallen further on the trading day only for a later sharp push up on the prompt contracts from talk of three fresh cargoes in the market.
“The rates returned to positive territory for the Capesize on Wednesday, the paper witnessed another sizeable jump in the prompt contracts.” noted a FIS shipbroker on the Wednesday trading day.
As such, the Capsize 5 time charter average posted $22,488 on Wednesday, 11 July 2018, up $366 day-on-day and saw the July contract went up by $1,250 to $21,625.
The market optimism was largely based on positive medium-term outlook and this sentiment had a strong correlation with paper markets despite a lack of physical activities in the Capesize market.
For the Panamax market, there was a steady positive momentum as the week progressed. Panamax time charter average gained ground inch by inch with first posting of $10,971 on Monday, before gaining later to $11,472 on Wednesday.
“We witnessed further gains across the curve on Panamax paper as the already firmer Atlantic market is complimented by some increased enquiry out of the Pacific,” explained a FIS Panamax shipbroker.
Despite the good index, some sellers continued to offer it lower with July trading $11,800 and Aug contracts being sold off to $12,300 before finding some support on Wednesday. In addition, the Q4 contracts drifted off to print $12,500 lows where it saw some good support again while Cal19 printed $12,300.
Meanwhile, the Supramax market had a rather static week, with the a rangebound time charter average and recorded $10,582 on Wednesday, down $4 day-on-day. Similarly, the Handysize market had a quiet week with its time charter average dipped by $18 day-on-day to $8,812 on Wednesday.