Dry bulk FFA market: Hot potatoes and cold showers

Early week capesize activity lifted the Cal and Q4 contracts, strength which gave Asian players the confidence to keep bidding going by midweek. But this enthusiasm quickly evaporated as European traders awoke and buyers pulled back.

Another frustrating, rangebound day followed. As bunker prices fell, voyage rates came under pressure and the physical indices were generally marked lower with only the occasional sporadic fixture done at improved levels. FFAs reacted accordingly with the curve trading lower, though solid support was evident nearby with nobody willing to hold the contracts for long.

Quieter but stable as the week drew to a close with little overall change to rates. As the news spread of the Baltic’s planned revisions to the 4TC contract, fronthaul corrected up $900 with backhaul marked higher too.

With the capesizes pushing and both basins continuing to gather some positive momentum panamaxes latched the early positive tone with a swell of support seeing firmer buying on June, July and Q3. Another surge in early trading particularly on prompts saw June break upward resistance while Q3 traded up to a new resistance level.

Atlantic business continued to gather momentum but it was a quieter close to the week with little deviation from Thursday’s close. The curve remaining well supported ahead with another decent index bolstering confidence.

Supramaxes naturally were stronger too, with rates creeping up in midweek trading on June and Q3. A bit more of a drift thereafter with the index disappointing and bids stepped back slightly as a result.

More bids were sold as the week went on in contrast to the recent positivity and forward momentum witnessed recently. Flat index numbers tend to create dull afternoons and by Friday activity levels were extremely limited, with the market looking ahead to a new week.

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