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Dry bulk FFA market: BDI on a high but no need for oxygen

Dry bulk FFA market: BDI on a high but no need for oxygen
The dear old Baltic Dry Index (BDI) advanced to a year’s high of 829 points on Wednesday, beating the four-month average of 576 and encouraging headline writers and analysts alike.

Increased shipments of low-priced iron ore were behind the rise as port inventories remain low. There is no shortage of ships of course and spot physical earnings are still below breakeven for many owners.

Still, it was only in February this year that the BDI touched a 30-year low so perhaps we should count our blessings. For brokers, these included a quiet start to the week as the China Dragon Boat holiday took the driving force out of the market.

Coming back on Tuesday they lost no time in pushing Q3 to $10k and Q4 to $14,250 with large volume changing hands along. Busy mid-week too starting with an upswing but with rates drifted post index despite the large volume as short covering and spread trading drove activity.

Slower by Thursday with rates coming off in early trading before staging a mini recovery with levels steadier in the afternoon but closing lower on the day. Tone was flat in both oceans but reasonably busy with decent volume changing hands.

An easier start on panamax paper with prompt seeing some selling, July and Q3 trading down while Q4 tested support. But with capes rallying and talk of more Atlantic enquiry some buying returned. Steadier after that with less deviation even though the cape push unsettled the market.

A rather dull finish to the week looks likely with rates a touch better bid on Q3 while further out there was little deviation. The Atlantic continued to see cautious optimism while the Pacific remains flat to positive.

Supras were also quiet early on but we did see action picking up, though first in a negative direction. But even the smaller ships could not ignore the mood and showed some forward movement as the week drew on - prompt months seeing stronger bids along with August and Q4.

Static again as the week ended with rates flat and no real drive in any direction. With the index starting to flatten there seems to be no rush as we wait for the next meaningful movement.

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