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Dry bulk FFA market: Now or never for a freight rally?

Dry bulk FFA market: Now or never for a freight rally?
Not a week in the freight market that many will recall fondly, if at all. All the key indicators - save the panamax index - were in negative territory up to Thursday and signals from the cargo market suggest little end weak demand or sentiment.

Throughout the year, traders have anticipated and priced in a Q4 premium but with October so far proving to be disappointing the market, then it’s getting close to the 'now or never' moment for the market.

Capes were caught in a long vessel market, with the Pacific basin continuing to be the most active with all the majors taking tonnage for West Australia-China. With the Atlantic quiet and tonnage still building up, charterers were able to take advantage and rates slipped in midweek.

As a result, paper was unable to buck the recent trend and continued its downward spiral with the entire curve coming under pressure. Another negative day Thursday with the most of the focus on prompt periods. Whilst the balance of the year came under pressure there seems very little appetite to sell Q1 16 onwards and some resilience on November leaving faint hope of that rebound before the quarter is out.

Losses too on panamax with the sell-off intensifying early in the week. With the transatlantic struggling, US Gulf fronthaul business losing its shine amidst an under pressure Pacific market, sellers did not hold back. November - December traded down and Q1 16 tested support while further out Cal16 and Cal17 also traded to lows before gathering some support.

Early trading on Thursday saw little change with levels steadier and with the index down we saw some buyers coming in to prop up the curve as prompt periods saw late gains on November and December.

Supramax paper was also softer from the start this week, with rates coming off pretty hard, surprisingly, given the more stable physical reports. Prompt softened once again as the week ended, though the back end remained pretty stable. November - December and Q4 lost ground but Cal 16 remained static despite another negative index.

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