The Baltic Capesize (BCI) and the Baltic Panamax (BPI) Indexes plunged to all-time lows yesterday, putting enormous pressure on those owners with a heavy spot market exposure.

The BCI fell to 830 points, while the BPI dropped to 559 points, down 31 from Monday. Overall, the Baltic Dry Index (BDI) marked its 10th straight downward session, now standing at 684 points, down from 700 points at the beginning of the week. The BDI is on course for a record low possibly by the end of this week.

According to the latest report on the dry bulk market, compiled by BRS (Barry Rogliano Salles) the only positive news coming out of the market this week involved coal shipments. There is evidence that thermal coal is proving more immune to the collapse in demand for commodities. Several coal companies reported stable demand and modest prospects due to power infrastructure developments in China, India and south east Asia.

But the situation of the iron ore market remained at a standstill, despite hopes raised from recent Chinese initiatives, like the adopting of further financial stimulus measures.
As a result the capesize sector is suffering, with the four time charter average dropped 30% over the week to close at US$2,425. “The good news – if it can be deemed that – was period rates remain higher than spot prices. At 169,000 dwt vessel was reported fixed for a year at US$17,500/day” said BRS.

In the Panamax market, positive sentiment evaporated this week, now down more than 35% since the beginning of last week. “The four time charter average fell by the same margin and finished Friday at just US$5,021/day. For many in the market it was a foreseeable, if not welcome, change. Rates had moved up earlier largely on the back of arbitrage between the paper and physical markets, plus positional tightness in the Pacific. The paper market has now fallen sharply, taking away the incentive to arbitrage” according to BRS.

With the market at these levels, activity is growing in the Sale & Purchase segment. BRS noted an increased amount of Japanese-controlled tonnage being mentioned as potential sales candidates, something not seen for some time.