Capesize (Atlantic and Pacific)
Again very heavy decline in Capesizes: minus 1,311 points in the BCI index, minus $ 14,449 daily on the 4 T/c routes. BCI index lost the 42.5 % on the time of last week!! The heavy decline of the Chinese steel production and consequently the import of iron ore, combined with the world wide credit squeeze have left Owners of Capesizes in a market which will only force them shortly to lay up several vessels: in fact Zodiac one of the biggest managers of Capesize tonnage already decided to withdraw all their open fleet from the market i.e. let vessels lay-up until market situation will improve again. They say the loss will be less if they will stop their vessels more than facing present market level!! Vale, the biggest world iron ore producer, has now little chances in pressing its Chinese clients to pay more and instead they have asked Vale to reduce it also for 2008 and also Arcelor Mittal group have asked for price reduction for 2009. This unofficial negotiation is one of the key factors for a partial recovery of the shipping market.
Panamax (Atlantic and Pacific)
In the Atlantic, the market continued to fall as few fresh cargoes to fix and no resistance from owners who accepted the first rate that charterers proposed. There was hardly any new business entering the market. It is unlikely for us to see many fresh enquiries entering the market in the coming week. And we are still not clear whether rates have gone to the bottom. The Same situation also appeared in pacific market where all the rates continued to decline; the price of iron ore which have not agreed yet between the Brazilian and the Chinese and the restriction on the Chinese importation of iron ore made the weak market continued. The Indian Ocean remained a wasteland for owners as well.
Handy (Far East/Pacific)
Very little activity this week, and rates dropping day by day. China stopped to import iron ore and other commodities, and the receivers are not performing the COAs they have, and refusing the cargoes they have already ordered. The main problem is that it is hard for them to get credit from the banks. Usual iron ore traders are moving less than the 10% of what they have done before the financial crisis. We have seen some period business reported, which at this moment were giving a premium if compared with the spot market.
Handy (North Europe/Mediterranean)
In this area the situation is becoming worse; a rumor said a handymax fixed at TC zero for a trip to USG. There were few cargoes from the Black Sea. Rates were not really good even for trades to India. In Cont Med area, the period was given a premium; the namrun has been fixed for abt 6 mos at abt 16.000 usd which was well abv the spot rate.
Handy (USA/N.Atlantic/Lakes/S.America)
Trips from the USG to Cont Med area have breached the wall of 20 k daily for modern large tonnage, and rates seemed to continue to go down. In South America, there were rumors - possible problems (huge congestion) in some Brazilian ports and strikes from Argentina farmers, which were not good news for both ship owners and operators. Some owners are starting thinking about to ballast ships from ECSA to WCSAM which seems a bit better.
Handy (Indian Ocean/South Africa)
As mentioned before there were no cargoes from the Indian subcontinents but too many ships open there. There were no coal cargoes for in the spot market from S. Africa. Probably this was the worst area at this moment and it seems the bad situation will remain unchanged there for a while.
Banchero Costa and Co Spa
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