Dry bulk FFA market: Big ships ride high

The surging paper rates paid homage to physical market where the big ships’ rates continued to push up in both Asia Pacific and Atlantic regions, thus prompting the paper market to move further north.

This strong market sentiment was reflected in the Baltic Dry Index (BDI) which reached a record high of 1,721 reading on Tuesday, 17 July 2018. The index last peak was more than six months ago at the zenith of 1,743 reading recorded on 12 December 2017.

However, the BDI soon took a tumble to 1,688 on Wednesday, partly due to the lack of physical activities seen at the start of the day. This weakness was reflected in the paper market where the Capesize 5 Time Charter Average posted $24,710 on Wednesday, down $870 day-on-day.

“It is hard to see the Capesize paper market slips much further while there are no signs of the physical collapsing, merely just re-adjusting,” commented a FIS shipbroker.

Later that day, the Capesize rates stayed rather rangebound as the deferred contracts saw some heavy volume going through with the Cal 21 trading in size at $16,350/$16,300.

Meanwhile, Panamax market had a slow start to the week as compared to Capesize market where most of the market participants played the waiting game for better market clarity.

Thus, the Panamax time charter average became rangebound and ended $12,246 on Wednesday, down $8 day-on-day and relatively unchanged to Monday’s time charter average at $12,244.

The static Panamax rates may be due to the escalating trade tension between the US and China with tariffs on soybeans and possible extended to other products that weighed down market sentiments.

Similarly, the Supramax market had a slow start to the week and this slightly softer tone was carried throughout the week.

“Supramax paper was subjected to a rather flat morning on Wednesday as we continued to trade around the last done levels with July trading $10,650 and September $11,950,” opined a FIS Supramax broker.

Thus, the Supramax time charter average reached $10,768 on Wednesday, up $54 day-on-day, while the Handysize market saw virtually no trading in the week with its time charter average at $8,220 on Wednesday, up $11 at day-on-day basis.

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