Thus, capesize paper market took a beating right from the start of the week, with capesize 5 time charter average recorded at $13,228 on Monday, 26 Feb 2018, before its slump to $12,395 on Thursday, posted a loss of $833 in the span of four days.
As the capesize rates crashed to a floor prices, various trade participants were quick to react with more market inquires, then the declining paper market seemed to turn the corner.
“The physical market appears to have bottomed out and this brought buyers back to the table in the paper market on Thursday,” noted a FIS freight forward agreement (FFA) shipbroker.
As such, the capesize Apr 18 contract became the biggest gainer with gains of $300 on a single day to $15,200 on Thursday, Q2 18 contracts then hiked by $275 to $18,075 and Q4 18 soared by $225 to $23,750.
“The Thursday morning session was very active with some good volume changing hands as rates ticked up down the whole curve,” observed the FFA broker.
Market inactivity later brought the uptrend momentum to a halt, with little movement but the paper market remained positive as trading day drew to a close.
Panamax paper market had rather an easy week compared to their capesize counterpart and saw gains throughout the week before a price correction at the end.
“We saw good volume changing hands for March contracts at $13,000-13,100 on Monday, while Q2 broke $14,000 support to print $13,800 low with levels also drifting lower further out.” said a panamax FFA broker.
Thus, panamax time charter average commenced the week at spot price of $12,056 and climbed to a peak of $12,138 before sliding to $12,074 level on Thursday.
During the trading day, panamax March contract continued to trade inside $12,650-$12,850 range while Q2 held a steady $13,800-13,900 range with little activity further out.
For supramax, the paper market opened the week on a softer note with limited activity and ended Monday with time charter average at $10,378, before gaining momentum to reach $10,984 on Thursday.
“The strong bid support on the supramax paper was clear again on Thursday as right from the start we searched for competitive offers.” said an Asia-based FIS shipbroker.
Thus, the supramax March contract was paid at the $11,900-$12,100 range and the Q2 was back trading at $13,000 on Thursday. Handysize paper market was then relatively quiet with little activity and ended Thursday at $8,512 up $350 day-on-day.
Apparently, the latest US tariffs on steel product did not caused much impact on the freight market yet. Some speculated that its impact will be first reflected on steel-making commodities like coking coal and iron ore.
How the import duty will be play out, remain a missing link at the moment. But China seems hardly unaffected by the tariffs at the moment by only accounting 2% of the total US steel import.
Perhaps, it is still too early to draw a conclusion yet as it is known that China has lot of indirect steel products shipped to US via Southeast Asian mills and even South Korean and Japanese mills, where they imported Chinese steel only to process them for further re-export to the US market.
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