Dry bulk FFA market: Is it getting better..?

This week it seemed that its fortunes – for capesizes at least - were moving heavenwards. Bullish technical signals had been recorded on the cape index and the BDI rose on surging demand and improved activity across all vessel segments.

Capes saw a significant amount of early week gains wiped out despite the index moving up and speculation was rife that the rally would be short lived. A mid-week slide was quickly reversed as Atlantic rates moved up and brought in fresh buyers.

The momentum continued as the week ended with an early push in Asian trading on April and Q2 before retracing a touch as Europe opened. The physical market seems to have more to give with reports of Tubarao/Qingdao fixing higher which could keep paper rates moving north.

Questions were being asked as to the sustainability of the panamax rally too and a dip in activity due to holidays in Asia saw levels marginally weaker. This was short-lived however and largely attributed to some profit-taking.  

The questions persisted as toppy talk and a slowdown in the index prompted selling midweek and a rather conservative carry forward. The market continued to come under pressure with levels easing gradually towards the end of the week. The prompt contracts continued to flatten out but there was fresh support the close near last done.

Supramaxes were softer with a negative feel as rates slipped throughout the early week with a flat index and offers creeping in without dramatic movement. Some support followed and the prompt months found better bids and crept up but with little activity.

As the larger sizes dipped towards the end of the session, supramaxes struggled for competitive bids nearby and along the rest of the curve – a better index kept the market stable but hardly exciting.

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