However, the US versus China trade tension seems to have eased on this week, but the fundamental problem of oversupply of vessels remained and casted a long shadow over the market.
“Capesize paper market has witnessed a softer start to the week with some early pressure applied down the curve,” commented a FIS Freight Forward Agreement (FFA) broker.
On Monday, 26 Mar 2018, Capesize 5 Time Charter average recorded at $9,304, up $240 day-on-day albeit a slow yet positive start. Soon the market positivity began to wear off as the freight rates took a dive during the short trading week.
“The physical decline appears to be gathering pace again which manifested itself in a significant paper sell off in the Wednesday morning session,” observed the FFA shipbroker.
He noted that damage on the Capesize paper market would appear to have been done early on as the nearly 7% fall in the index did little to change rates for the remainder of the day. As such, some heavy losses were seen in the Capesize paper rates on Wednesday, with April contract becoming the biggest loser and fallen over $825 on a single trading day to $11,100.
Thus, the Capesize 5 Time Charter average closed at $8,694 on Wednesday, down $611 day-on-day and booked a loss of $610 as compared to Monday’s rate of $9,304.
Panamaxes fail to save the day
Meanwhile, the Panamax paper market did not save the day as seen so many times in supporting the freight market. So far, the Panamax paper market had remained fairly stable at the start of the week but only to crumble under pressure later on.
“Panamax paper saw further deterioration in rates on Wednesday as the open tonnage list continues to build ahead of the impending Easter holidays.” said a FFA shipbroker.
Under the downward trend, April contract and Q2 were sold off to $12,600 and $12,750 lows respectively on Wednesday before finding some support later.
“Once again, the selloff was cautious and despite another sharp decline on the index, we saw a relatively steady afternoon session on Wednesday,” concluded the shipbroker.
Then, the Panamax time charter average booked at $12,214 on Wednesday, down by $257 day-on-day, and dropped by $442 as compared Monday’s rate of $12,656. The smaller vessels suffered the same fate as their bigger vessel counterparts with falling rates. At the start of the week, the Supramax paper market continued to feel the pressure that was seen at the end of last week as rates continued to fall once again on this week.
By Wednesday, the Supramax paper market was once again on the softer side. Its most aggressive April contract had moved trading down to $11,550, then the Q2 contract followed suit with trading at the $11,800-$11,750 range throughout the day. Supramax time charter average then ended Wednesday at $11,767, down $249 day-on-day and down $396 from Monday’s rate of $12,163. Lastly, Handysize had a quiet trading week with time charter average recorded at $9,543, up $32 at day-on-day basis.
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