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Dry bulk FFA market: Summer, but no blockbuster for dry freight

Dry bulk FFA market: Summer, but no blockbuster for dry freight
Two financial crises ago, in 1997 a horror movie was released called 'I know what you did last summer'. At the start of this week, freight brokers were studying a script with the working title 'Didn’t do much last summer'.

It would be long, with little storyline and most viewers would fall asleep in the cinema. As it turned out, though the narrative was about to get more interesting. It didn’t turn out to be a blockbuster but it was an interesting trailer.

Cracks were appearing on capesize freight, with an early week sell-off in good volume, although buyers were still present. The lack of impetus from physical saw the paper contango gradually easing but the curve was priced more on expectation than reality.

By the week’s end however, there was a day of rises across the curve despite spot physical not showing much sign of life. In fact the lacklustre physical makes the current strength on paper hard to decipher, but there is no doubting the good buying interest around in depth. Strong demand for Cal 16 where the market lacks volume sellers which has technical support.

Panamaxes started subdued with the Atlantic squeeze losing momentum and more offers emerging. There was real reluctance from sellers to chase it down further and after the curve dipped lower fresh support was evident.

Western optimism underpinned the market lending short-term stability against firm resistance on Q3 and Q4. Good support continued Thursday with Q4 testing upper resistance and Cal16 pushing up again with technical signals indicating further gains were possible.

Supramaxes suffered a dull and relatively quiet start with activity very limited. Much of the curve looked flat and unchanged though trading down a touch. A few stronger bids popped up on prompt months with the rest of the curve remaining pretty flat, with some areas down a touch.

The index refused to impact much by way of direction but late week saw the supramaxes catch the capesize uplift with upward momentum lasting until end of day. Steady physical reports on smaller vessel sizes provided some support nearby and with possible changes in outlook saw rates continued to squeeze up on Q3 and Q4.

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