Signal Dry Bulk Weekly Report

Chart of the Week Dry Bulk: Brazil grains to China

Brazilian soybean exports to China increase higher than last year

Data Source: The Signal Ocean Platform, Dry Bulk Flows

https://go.signalocean.com/e/983831/dry-dynamic-drybulkflows/2nyfg7/319669314?h=lROgeqzzaKabyu2dPQkB7ciQZBxMVUBe6dcwQHeP9gg

 

In the third week of May, we still see a slowing momentum in the smaller vessel categories, while the Capesize segment still shows an upward trend, and demand growth also shows a recovery compared to the end of April. Meanwhile, the Panamax segment is getting a boost from the increase in soybean exports from Brazil to China, with monthly volumes reaching a peak towards the end of the first quarter, which is higher than last quarter (left chart above).  Looking in parallel at the trend in ton-miles from Brazil to China (right chart above) for all size classes of dry bulk vessels, there is a clear upward curve since the end of February. The recent trend in ton-mile growth has now reached its highest level since early 2021.

 

Uncertainty remains high in the grain segment over the extension of the Black Sea Grain Initiative, while the head of the U.N. aid agency said Monday that the agency is holding "intensive talks" to maintain the agreement, which facilitates the export of Russian and Ukrainian grain and fertilizer through the Black Sea, as the May 18 deadline set by Russia for a possible exit from the agreement approaches.

 

For more information on this week's trends, see the analysis sections below:

Freight Market, Supply, Demand and Port Congestion

SECTION 1/ FREIGHT - Market Rates ($/t)

Capesize - Firmer | Panamax - Supramax - Handysize - Weaker

 ‘The Big Picture’ - Capesize and Panamax Bulkers and Smaller Ship Sizes

In the third week of May, the Capesize segment recorded a similar firm level to the previous week, while rates for other vessel size classes offered a weaker outlook over the past five weeks.

  • Capesize vessel freight rates are at $22/tonne, and have held at that level for the past three weeks and are up from the 8th week.

  • Panamax vessel freight rates from the Continent to the Far East fell below $37/tonne, down nearly $5/tonne from the week 15 peak.

  • Supramax freight rates for the Indo-ECI route have remained at levels below $11/tonne for the past three weeks, with signs of weakening in the third week of May.

  • Handysize freight rates for the NOPAC Far East route fell below $30/tonne, with the downward trend continuing over the past seven weeks.

SECTION 2/ SUPPLY - Ballasters (# vessels)

Capesize-Panamax- Decreasing | Supramax - Handysize Increasing

 Supply Trend Lines for Key Load Areas

As far as the number of ballast ships is concerned, an upward trend can be observed for the smaller ship categories, while a downward correction seems to be taking place for the Capesize and Panamax ships.

  • Capesize SE Africa: The number of vessels is now 106, 5 less than the previous week and 60% higher than the peak of seven weeks ago.

  • Panamax SE Africa: The number of vessels dropped to 142, 10 lower than the previous week and 40 more than the annual average.

  • Supramax SE Asia: The number of vessels increased to 95, 10 more than the previous week and almost 6 more than the average for the year.

  • Handysize NOPAC: The number of vessels is now at 88, almost 13 more than two weeks ago and 25 more than the low in week 6.

SECTION 3/ DEMAND - TonDays Softening

In the third week of May, there is a significant downward correction in the Panamax and Supramax segments, while the Capesize segment continues to show a firm trend.

  • Capesize demand ton-days: The upward trend has continued since the end of week 16, and this week's increase is now at the high of five weeks ago.

  • Panamax demand ton-days: Growth slowed in the third week of May, falling to the lowest level since the last peak in week 14.

  • Supramax demand ton-days: The growth trend in demand for Supramax vessels has now dropped to the low level of week 14, with still a severe weakening trend throughout May.

  • Handysize demand ton-days: In the third week of May, a significant downward correction is observed, while the current growth is at the lowest level of week 14.

SECTION 4/ PORT CONGESTION - No of Vessels Increasing
Dry bulk ships congested at Chinese ports


For the second week in a row, congestion increased in May as the number of Panamax and Handysize vessels increased.

  • Capesize: The number of vessels now stands at 105, down 9 from the first week of May.

  • Panamax: The number of ships is now at 266, 17 more than the previous week and the highest level since the beginning of the year. 

  • Supramax: The number of ships is now 258, 8 lower than the previous week and 9% lower than the peak of two weeks ago.

  • Handysize: The number of congested ships has increased to 193, 17 more than the previous week, and there has been a steady increase since the end of week five (~133 ships).

Data Source: Signal Ocean Platform