SECTION 1/ FREIGHT
‘The Big Picture’ – Capesize and Panamax Bulkers and Smaller Ship Sizes
Market Rates ($/t) Weaker
July is nearing its end with an increase in the number of ballast vessels from the lows recorded at the end of June, while the daily volume shipped (3w MA) falls to below 1 million in terms of demand (see image above). The downward revision of expectations for the iron ore industry is already reflected in the profits of iron ore companies.
Rio Tinto will reportedly be the first of the global iron ore groups to report lower half-year profits this week as supply chains normalise after COVID-19 and attention turns to how suppliers in the Chinese steel industry view customer demand.
A mixed week in the last week of July, where we saw signs of a relatively quiet market with a soft revival of rates in Panamax Cont- FE. It appears that momentum has remained relatively flat in the Handysize and Supramax segments.
Capesize vessel freight rates from Brazil to North China have fallen below $19.5 per tonne, with the last low in week 22 when rates fell below $19 per tonne.
Panamax vessel freight rates from the Continent to the Far East held above $30 per tonne early in the week, although it appears that the upswing of recent days is beginning to falter.
Supramax vessel freight rates on the Indo-ECI route are still below $9.5 per tonne (as of the end of the previous week), and it looks like momentum will remain relatively flat.
Handysize freight rates for the NOPAC Far East route fell to $26 per tonne, with a downward trend in the last few days of July.
SECTION 2/ SUPPLY
Supply Trend Lines for Key Load Areas
Ballasters (# vessels) Increasing
The last week of July held the surprising strengthening of the upward trend of the previous week, with increases across all ship size categories.
Capesize SE Africa: The number of ballasters is 128, well above the annual average of 83 and up 50% from the low in week 26.
Panamax SE Africa: The number of ships held the mark of 160, exceeded since the previous week, which is almost 60 above the average for the year.
Supramax SE Asia: The current number of ballast ships has increased to more than 110, which is almost 14 more than a week ago and 30% more than three weeks ago.
Handysize NOPAC: The number of ballast ships has surprisingly increased by more than 80, 23 more than in week 28.
SECTION 3/ DEMAND
Summary of Dry Bulk Demand, per Ship Size
Tonne Days Decreasing
In the last week of July, the downward trend continued, while the signs of recovery remain uncertain, as the rest of the summer season seems to remain quiet.
Capesize: Demand growth fell to a new low in week 30, and the downward revision appears to be for early August.
Panamax: The momentum of a rise has not yet returned, but the recent low was above the weakness recorded in the first ten weeks at the beginning of the year.
Supramax: Sentiment maintained a similar momentum as in the previous weeks of July, with stronger growth than in June.
Handysize: The growth in tonne days follows the downward correction of the previous days, while the outlook seems to be relatively flat, with the last peak recorded in week 13.
SECTION 4/ PORT CONGESTION
Dry bulk ships congested at Chinese ports
No of Vessels Increasing
The fourth week of July began with an increase in congestion, but as we noted the previous week, there is a high potential for a downward correction before the close.
Capesize: The current number of ship congestions dropped below 120, which is 14 lower than two weeks ago.
Panamax: The number is now 259, which is 14 more than the previous week, while there seems to be an upward correction in the last three weeks.
Supramax: The number of vessel congestions increased to 258, which is 9% more than the previous week, and it seems to be the highest number since the end of week 25.
Handysize: The number of congested ships has now exceeded 190, which is 16 more ships than at the end of the previous week, and it is one of the highest levels since the beginning of this year.
Source: By Maria Bertzeletou, Signal Group
