Dry bulk FFA market: Not inspiring a lot of confidence

It came in a week that saw some holiday activity take the wind out of whatever had previously been happening in freight and though the market is proving surprisingly resilient, it hardly inspired a lot of confidence.

With the Asian miners absent for a while this week it was no surprise that capesize activity was limited in the Pacific. The Atlantic stumbled with C3 and C7 fixing lower but the paper was rangebound with time spreads generating most of the liquidity and flat price action limited.

Thursday started much weaker with rumours of Vale fixing C3 lower and sellers flooded the nearby once again. However the cape market is these days much tougher than it used to be and once again found support. It will be interesting to see how, with the index providing very little in the way of positive news, if the paper can hold these rates for much longer.

The prompt was again the main focus on panamax with news of stronger fixtures pushing up Q3 and as the Q3 v Q4 spread tightened to par we continue to see sellers of the Q4 indicating this trade could go back into positive territory.

The market opened a touch softer on Thursday with Q3 trading down but the curve then stabilised in a relatively quiet morning session and gradually started to tick back up in the afternoon after a positive index. Rather flat on Q3 and Q4 with the narrow ranges continuing throughout the afternoon.

Supramax levels pushed up somewhat then held with Q3 trading better and Q4 lagging but market chatter continues to suggest physical is firm, especially in the Atlantic Basin despite some questions as to the sustainability of the “rally”.

The market started Thursday on a slightly stronger note but gradually settled down and remained pretty static throughout the day. A positive index once again but the week seemed to run out of steam as we drifted to a close.

Contact FIS: http://freightinvestorservices.com/freight-derivatives/ffas/

Add Seatrade Maritime News to your Google News feed.