Dry Bulk ‘Forward Freight Agreement’ Lifts Capesize Segment

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(Image Courtesy: IHS Fairplay)

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, crept higher on Wednesday on firmer capesize rates. The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, inched up 2 points, or 0.18 percent, to end at 1,097 points.

“Following seasonal weakness in the dry bulk sector resulting from the Chinese New Year, we believe the outlook for the dry bulk shipping market is both clear and bright,” analysts at Jefferies said in a note on Tuesday. An overview of the Capesize, Panamax, Supramax and Handysize forward freight agreement (FFA) is briefed below:

Capesize FFA – Activity and optimism returned to the cape FFA market as we saw increased activity in the physical market and improved rates paid in both basins. The C5 ticked up to 6.65 while C3 once again moved above USD 15.00/mt. With more of the ballasters being fixed and the cargo list/tonnage list looking more balanced in the Atlantic, the market ‘feels’ better. The CNY holidays are just around the corner mind you and this will, of course, dampen activity at some point. Right now, it feels, good, going forward, who knows what is in store for us?

Panamax FFA – A drop in activity in both basins and the business that is being done seeing slightly easier levels made for another bearish day on Panamax paper. Prompts came under further pressure shaving off average USD 300 with Feb and Mar printing USD 10700 and USD 12300 lows respectively before finding some support. Once again losses were less severe further out with support on Q2 at USD 12900 and Q3 at USD 11750.

Supramax FFA – Supramax paper was slightly softer yesterday but again on the back of thin volume. The prompt slipped early with March trading USD 11,100 – USD 11,000and Q2 down USD 150 from the day’s before level as was reported USD 11650. After an index that was pretty much as expected (10TC -USD 91 and derived 6tc -USD 76), the market saw a stand-off as we lacked any true direction.

(Source: Freight Investor Services (FIS), Reuters, Hellenic Shipping News)

Sea News, February 8