Dalian: Forward freight arrangements (FFAs) are pointing to an end to the mini-boom seen in dry bulk rates this month.
‘New York financier Dahlman Rose observed that FFAs have declined for the past two days, the first reversal since February 2. The financier also noted that spot market rates “are losing steam and could soften in the coming days.”This view is backed by Norway’s Fearnley’s and comes as the Baltic Dry Index rose more than 4% yesterday to crest the 2,000 level. “[O]n the back of an FFA market declining significantly,” Fearnley’s warned in a weekly report, “the sentiment could be turning. The low prices of commodities have been, in our opinion, a major factor in the resurgence of the market in the last 3 weeks, but amid continuing reports of companies having problems (e.g. Samsun filing for protection) and a market increasingly driven by paper (thus the ‘yoyo effects’), this could bring back a ‘wait to see what happens’ situation.”