FFA market: Is the dry freight market ready for a holiday?

The BDI fell on weak demand for panamaxes and supramaxes but capes felt strangely confident, with some pundits prepared to forecast that the tide has turned for dry bulk fortunes. Perhaps dry freight players will now take a bit of holiday and regroup in September to properly judge how things stand.

Capes started with some strong buying in Asian hours but this enthusiasm quickly subsided on cautious index gains. But the early week dip was reversed as stronger fronthaul cargoes emerged and paper traced a relatively tight range on the front end but with healthy volumes. 

As the week drew on, the market stayed choppy but slightly firmer, leaving most periods unchanged. The deferred lacked buyers but physical continued to make small gains, although the interest does not appear to extend much beyond very prompt fixtures.

Panamaxes seemed to follow cape sentiment early in the week, with early buying evaporating only to see a late push to leave the market flat. Indices were uninspiring but the sharp paper/physical discounts suggested support would start to gather at these levels.

The curve maintained this good support only to drift lower in light volume as the week progressed, with a sombre tone on the front end and nearby quarters. Despite the capes’ positive momentum and ECSA seeing some positional tightness, the tone remains negative with the weight still felt on the offer.

Supramaxes felt the draw on prompt periods, with better buying here, though further out interest remained thin and there was little deviation in rates. A midweek lull followed with the curve little changed and no trades reported in the market.

At these levels, we saw support on the bid side of the curve but no real movement was visible and the week ended relatively quiet once again. Once again, there was more support on the bid side again with offers remaining thin, a marginally negative index leading to no great changes.

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