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Dry bulk FFA market: A good week for a party but not all over for freight

Dry bulk FFA market: A good week for a party but not all over for freight
It is probably fair to say that players were somewhat distracted last week, with hundreds of events taking place in London International Shipping Week. And the freight market did its best to push on, despite what could still be called a nervous economic backdrop.

The BDI fell on Thursday for a third consecutive session and the broader news was grim; movements of major commodities fell in August from multi-month highs in July, suggesting that low prices are no longer enough to drive buyers to re-stock.

This will impact outlook for shipments to China of commodities such as iron ore, crude oil, coal and soybeans, especially as the devaluation of the Yuan continues to erode price advantages enjoyed by foreign suppliers.

Capesize rates came under pressure midweek as physical rates and bunker prices slipped, but healthy volume changed hands with the front end giving up the most value and Sept and October marked down heavily.

Another sell off followed, with weaker fixtures reported for both Pacific and TA round leaving little to be optimistic about and it appeared the day would just fizzle out. But the capesize market was full of surprises and as Brazilian cargoes crept out of the woodwork a shortening tonnage list for Sept dates suggested there good times may not be gone for good.

Despite fresh optimism in the Atlantic it was cape sentiment that drove the panamax market, trading lower and a slow down in activity which eventually brought some stability as light support emerged.

Easier as the week ended with prompt contracts bearing the brunt but with Q4 holding on to support and some optimism US Gulf grain flow could spark some latent Chinese demand and stem the bearish tide.

Supramaxes saw the market drift with limited activity and with larger sizes softening and physical reports showing a weak Atlantic, bids got picked off. The market slowed to a halt with physical reports suggesting Pacific is static and the EC SA slowly weakening and levels trading pretty flat across the curve.

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