The upward momentum might push the BDI to surpass previous zenith set this year as the Chinese steel mills keep high production rates ahead of the capacity cut in October 2017.
Moreover, the Chinese authority had stepped up environmental measures to improve air quality near the vicinity of Beijing as the capital held the upcoming National People's Congress on 18 October 2017. Chinese steel mills are expected to reduce their sintering units ahead of the meeting to prevent smog in the city. In doing so, many mills have turned to using lump and pellets in furnaces to comply with environmental regulation, boosting up their prices and shipping tonnage-miles.
“It feels almost inevitable we will again test the $20k on index level over the couple of days,” commented a FIS FFA broker. “So it will be interesting to see if that brings in more sellers or if the market can push beyond recent resistance levels.”
In pushing the $20,000 barrier, capesize September and October contracts were whiskers away with trading up to $19,150 and $19,550 respectively. Overall, the capesize 5 Time Charter Average achieved $18,231 on Wednesday, up 8% from $16,819 recorded on Monday. The rising rates were attributed to new and better fixtures on both basins which might fuel further upticks toward the end of the week.
Panamax opened the week strongly before bowing to pressure and lost much momentums as some questions over whether there is enough volume out there to sustain current levels. By the end of Wednesday, the Panamax Time Charter Average recorded at $10,546, up $316 day-on-day, and gained 7% or $696 from rates of $9,850 seen on Monday.
“Once again the positive tone off the underlying persists on Wednesday but continued questions as to the longevity of the current strength is making for an anxious jumpy market with nobody wanting to miss the boat one way or the other.” said a FIS Panamax FFA broker.
Later in the trading day, the tone in the closing remained optimistic with highs seen on September and October at $11,500 and $12,800 respectively, while Q4 saw resistance at $12,350 tested again. While optimism was seen in panamax market, the supramax stagnated in contrast with the rates barely moving.
“With pressure on the larger sizes the positive feel disappeared as we then lacked competitive bids down the curve causing us to drift to an uneventful close,” said a FIS FFA broker.
Then on Wednesday, aupramax contracts for Sep was paid $10,450 and Oct $11,150, which filtered into the Q4 as $10,800-$10,900 was seen trading. Overall, the Supramax Time Charter Average reached $9,777 on Wednesday, similar to the rate on Monday and down $8 at day-on-day basis. Finally, the handysize rates made some gains on Wednesday, recorded $7,259 for time charter average, up 1.6% as compared to $7,139 on Monday.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.
