The Baltic Dry Index seems unable to cope with the downward pressures currently applied in the dry bulk market, as negotiations between iron ore miners and steel industry players of China and others aren’t yet concluded.
‘Despite an earlier estimate that this year’s negotiations would be among the quickest of these past few years, miners proved reluctant to concede significantly lower prices (40-50%), mainly because of the BDI’s rally at the beginning of the year. This has now proven to be weighing heavily on the dry bulk market, with more and more cargoes being left out in the dry.The BDI has been steadily plunging for more than 11 sessions, ready to fall for a third straight week. Yesterday, the BDI ended at 1,714 points, down by 26, with falls obvious among all ship types. The Capesizes and the Supramaxes were the two biggest losers, with the Capesize index losing 35 points at 2,134, while the Supramax index shed another 33 points at 1,365. As a result, the average daily time charter rate for a capesize has now dropped at $19,034, when at the peak of this year’s rates it could fetch up to $35,000 on average. Similarly, the Panamax sector has found itself again below the Supramax field, with average daily rates standing at $12,262, against $14,271 for the supramaxes. According to Fearnley’s latest weekly report, for the panamax sector there are no clear signs of any recovery, but it “seems like the market has flattened out and found a bottom”. As for the capesize market, the broker said that “uncertainty prevails and focus on both sides is on covering spot positions.