The main ?victim? is once again the capesize sector which suffered another loss with the Capesize Index (BCI) now standing at 2963 points.
Another negative session, albeit at a lower pace of downfall was yesterday"s one in the Baltic Exchange, with the Baltic Dry Index (BDI) ending at 1950 points, down by 10. The main ?victim? was once again the capesize sector which suffered another loss with the Capesize Index (BCI) now standing at 2963 points, after shedding another 161 points. On the contrary smaller vessel types improved their earnings, with the supramax sector proving the most resilient of all.
Detailing the situation in the capesize sector, Fearnleys weekly report noted that rates continue softening in all segments. ?Accidents and weather problems in West Australia are causing reduced number of cargoes from this area and rates to China are dropping? said the broker adding that the Atlantic basin has been suffering from a complete lack of fresh ore cargoes to Europe. Similarly the Brazil/China trade is less busy and rates are hovering at mid $22,000.
Nevertheless, the market is still proving its resilience and is standing its ground, protecting the majority of the gains sustained from the beginning of the year. That doesn"t mean that this picture could be the same for much longer. Another voice was added this week to those claiming that the rebound of dry bulk shipping rates could prove shortlived at least for the following couple of quarters, coming from London"s Galbraith"s Ltd.
Another factor weighing in has been the latest clash during the negotiations between mining giants and the Chinese steel industry. A Rio Tinto official stated that Rio prefers to put off the negotiation until the market stabilizes. The world's three leading iron ore suppliers remain hesitant and intend to postpone the negotiations, Shanghai Securities News reported. This could indicate that China could stop buying iron ore cargoes, adding a renewed pressure in prices, thus gaining the upper hand in negotiations for the annual contract prices and realizing its goal for a drop of 30 percent.