Chartering market at hand: Handysize and Supramax/Ultramax // week 16

The South Atlantic Handysize/Supramax shipping market was showing elevated levels of fixing activity at the start of the week thanks to increased grain shipments from Brazil and Argentina on both front-haul and transatlantic routes. Exports from WAfr also rebounded earlier in the week. Later on, however, the market has predictably slowed down amid the Easter holidays. After a slight upturn, Supramax rates have dropped and stay unchanged closer to the end of the week. Meanwhile, Handy owners have managed to take advantage of the pre-holiday rush, raising freight levels by $1k daily and $1-2/t on all routes.

A similar situation has unfolded in the Continent and the Mediterranean Sea , where charterers' desire to close deals before the holiday weekend was supporting healthy activity in the first half of the week, but ultimately, freight rates have not changed significantly.

The USG market is dominated by pessimistic sentiment. Many shipowners are ballasting their vessels to other regions, mainly to ECSA. However, freight rates are flat in this area as well. Note that USTR made a decision regarding Chinese-built ships, after which it became clear that shipments from the USA would be weakly affected, as vessels carrying US government cargo or arriving empty for loading would not be subject to tariffs.

Asia-Pacific rates stay under pressure and sometimes charterers manage to achieve cuts of $0.25-0.5/t.

The Handysize/Handymax segment has seen decreased exports of steel from Japan and South Korea, while shipments from China are stable. The number of vessels open off SE Asia and Australia has grown over the week. Supramax/Ultramax steel traffic from the Far East has also slowed down, as have exports of Indonesian coal. The upturn in nickel ore shipments from the Philippines is now the only owners’ advantage.

Freight levels are generally flat in the Indian Ocean due to a decline in vessel count. “Owners have repositioned their fleet to SE Asia as the market is comparatively better there. Meanwhile, cargoes ex PG/WCI are still there whereas there are not many cargoes ex ECI,” a broker explains.

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The consequences of introducing fees for Chinese-built vessels and Chinese ship owners and operators are likely to lead to increased transportation costs towards US ports; however, this should not heavily impact shipments from the USA. In the South Atlantic, the expected ballaster inflow may have a negative impact on rates, although the cargo traffic will certainly perk up after the Easter holidays.

Even after the holidays, activity will hardly go up significantly in the Continent and the Mediterranean Sea, as the grain season is gradually coming to an end, and high prices for Ukrainian corn and European wheat are unlikely to stimulate demand among major importers. Also, demand for steel scrap looks moderate in Turkey, and local plants do not hurry to step up imports.

Meanwhile, the Asia-Pacific Handysize/Handymax market may see improvements in 2H April. “B/H rates are still not that bad, so maybe owners will prefer such business and tonnage list might reduce,” a broker suggests.

Check latest fixtures, ideas and news from Handy & Supra market using the following links:

Supramax/Ultramax owners enjoy positional improvements in ECSA

Baltic & Continent Handysize/Supramax shipping market relatively stable

Trade expectedly quiet on Mediterranean Handysize/Supramax market ahead of Easter

Holidays looming on horizon affect USG Handysize/Supramax traffic and rates

Asia-Pacific Supramax/Ultramax levels stay under pressure

Rates for Supramax/Ultramax shipments stagnant in Indian Ocean

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