Seatrade Maritime is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

FFA Market: Set for a hot, short summer?

FFA Market: Set for a hot, short summer?
Another perplexing week in the freight market, with the big ships determined to see the summer out on a high and panamaxes trying to find stronger direction. Capesize physical rates reached their highest levels since late 2014 this week, with continued strong cargo flows and a better supply/demand balance.

Not everyone thinks it can last but the way capes have been trading, there’s nothing for it but to make hay while we can – though perhaps traders in Singapore will come back from their long weekend with a different view of the market.

Capes were volatile from the start with the front end whipping around before buying faded. It wasn’t just the nearby with Q4 up and Cal 16 trading through resistance in considerable volume.

By midweek, the physical had shown no signs of slowing and initially there was more buying interest but disappointing indices saw paper aggressively sold off on August, September and Q4. Coming off again as the week ended on talk that the spot market is turning, with buyers wary – whether the already heavily-discounted paper will slide further remains to be seen.

Panamaxes saw Transatlantic fronthaul levels flattening out and the Pacific in stand-off but drew on cape sentiment particularly from some supporting USEC split cargoes. The curve was bid up and held a steady range, offering some resilience even as capes were sold off.

Further out levels were easier with a little weight developing offer side and with the Atlantic starting to gather more momentum came an expectation that we could hold onto these prompt gains.

Little deviation as the week ended with the curve holding steady despite the gloomy cape market – the west still looks relatively healthy compared to the stand-off in the Pacific but the current carry looks relatively comfortable.

With the larger sizes pushing early on, supramax paper saw an improved nearby as well as small gains were added further out with flatter indices and support gathering just off last done. Improved buying again on prompt by midweek but with light volume traded as sellers sat back and waited.

Quiet as the week ended with liquidity struggling to build among static rates. Despite a continued gentle uptick in the index buyers seemed unwilling to improve their ideas.

Contact FIS: