After taking various big plunges into the deep, there is no other way for capesize market to go but up. Improved paper market sentiment on paper seems to provide the perfect ingredients for rebound but if there is a need for more cargoes on the physical scene for things to get more rosy.
Dry bulk freight rates held stronger for most of this week, thanks to stronger panamax rates that continued to lift the market while capes were more mixed. Throughout the week, capesize rates have offered little support following pattern of mixed sell-offs.
The dry bulk market had a great run from the fall of the last year until March this year when the BDI reached 1,338 points on 29 March. While freight rates still have been hovering at just above break-even levels, the improvement of the market has been impressive in relative terms; freight rates have quadrupled in the last year, admittedly from abysmally low levels.
In a week dotted by various countries’ public holidays, the freight market found it hard to bounce back and witnessed further declines across the sectors.
“Nervousness” has set into the freight market, sending the Baltic Dry Index (BDI) to fall off the 1,000 point mark again.
It is hard to break the chain-links between the dry bulk markets from the general health of China’s economy. In common with a lower China Purchasing Managers' Index (PMI) seen in April, the Baltic Dry Index (BDI) has stumbled to the current level of 1,000 from the 1,100 points last month.