Chart of the Week : Dry Bulk Panamax tonne days Cont to the Far East
Remarkable upturn in the BPI end of November with an increase in tonne days from the Cont to the Far East
The dynamics of the freight market at the end of November fueled market participants' expectations of an upturn in the final month of the year, with the Panamax ship size continuing to gain significant strength compared to the smaller vessel categories. In addition, rates for Capesize vessels from Brazil to North China saw renewed gains, the stability of which is yet to be confirmed as iron ore prices have recently gained momentum, providing positive momentum for the end of the final quarter of this year.
In the Panamax vessel segment, the increase in tonne days between the Continent and the Far East after a slump at the end of October is interesting to observe. This recent upward trend appears to have supported the rise in the Baltic Panamax Index, which points to a late recovery also aided by an increase in Chinese coal imports.
While the rise in iron ore prices was triggered by a Chinese stimulus programme, there was eventually a downward correction in price momentum as the Chinese government warned of tighter market surveillance. According to data from Fastmarkets, the price of 62% iron ore imported into northern China fell 0.94% to $133.48 per tonne.China’s state planner said on Monday it had conducted a survey of the price indexes of several commodities, including steel, iron ore and lithium, to maintain a healthy market.
For more information on this week's trends, see the analysis sections below:
Freight Market, Supply, Demand and Port Congestion
SECTION 1/ FREIGHT
‘The Big Picture’ - Capesize and Panamax Bulkers and Smaller Ship Sizes
Market Rates ($/t) Firmer
The last week of November fueled optimism for firmness in December with a significant upturn in the Capesize segment, while Panamax maintained the robust sentiment of previous weeks. The smaller vessel categories are still struggling with lower prices, but there was an immediate upswing in the Handysize segment.
Capesize vessel freight rates from Brazil to North China reached $23/tonne, up 9% on the previous week and 17% on the previous month.
Panamax vessel freight rates from the Continent to the Far East rose to $42 per tonne, up 13% from the same week a month ago.
Supramax vessel freight rates on the Indo-ECI route held similar momentum of the previous week at $12 per tonne compared to the previous week, and only 4% higher than in the same week a year ago.
Handysize freight rates for the NOPAC Far East route hovered around $29-30/tonne throughout November, and at a similar levels of a month ago.
SECTION 2/ SUPPLY
Supply Trend Lines for Key Load Areas
Ballasters (#vessels) Increasing
The number of ballasters was above the annual average for all ship size classes, with the exception of Panamax ships, where the number has been falling continuously since the end of week 38.
Capesize SE Africa: The number of ballasters held accelerated levels at around 108, with the last low in week 40 (~76).
Panamax SE Africa: The number of ballasters has dropped further to 93, which is 4 less than in the previous week, when the last peak was reached in week 38 (~160).
Supramax SE Asia: The number of ballast ships rose to 117, confirming the previous week's signs of an increase to 120, with a constant upward trend for five consecutive weeks.
Handysize NOPAC: The number of ballast ships indicated a rise to 96, when two weeks ago hovered at around 90, while the latest low remained at week 44 (~76).
SECTION 3/ DEMAND
Summary of Dry Bulk Demand, per Ship Size
Tonne Days Decreasing
Demand growth has declined for all ship sizes, with the Capesize segment seeing an interruption to the downward correction of recent days.
Capesize: The downward trend seems to have come to a halt, with the last peak reached in week 41, while the growth rate now seems to be higher than three weeks ago.
Panamax: Despite the downward correction at the end of November, the latest growth rate is higher than ten weeks ago, which still suggests a firmer mood in the freight market.
Supramax: The growth rate is still at its lowest level since the end of week 44 and there are no immediate signs of an upturn, while the last peak was recorded six weeks ago.
Handysize: Demand growth is steadily declining, with the latest growth rate at its lowest level this year and freight market sentiment picking up again in December.
SECTION 4/ PORT CONGESTION
Dry bulk ships congested at Chinese ports
No of Vessels Increasing
The level of ship congestion continued the upward trend of the previous week, with congestion increasing in all ship size categories at the end of the month.
Capesize: The number of congested vessels remained at an accelerated level of around 120, with a sustained increase over the last three weeks.
Panamax: The number of congested ships rrose to 211, 7 more than in the previous week, whereas three weeks ago it did not exceed the 190 mark.
Supramax: The number of ships is still over 240, with an increase of over 230 since the end of week 45.
Handysize: The number of congested ships now stands at 187, almost 6 higher than in the previous week, when the figure was over 170 three weeks ago.
Data Source: Signal Ocean Platform