London: The forward freight agreements (FFA) markets, particularly for the capesize segment corrected quite sharply overnight.
3Q Capesize rates fell 32% in a day to $29,500/day on heavy volume, bringing it in line with the longer-dated contracts which are in the US$27,000/day range. 3Q Panamax also fell 19% to $19,860/day.
'The sharp backwardation of the forward curve suggests that the current rally in the BDI will likely be short-lived. It is worth noting that the BCI (for capesize which has been the key driver of the recent rally) is now at 8147, only 13% below last year's average level; and already 5% and 24% above its 3 year and 5 year historical averages,' Citigroup wrote in a research note. [04/06/09]
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