Handysize & Ultramax Market: A Rollercoaster Ride Across Global Waters

The dry bulk shipping market continues to navigate choppy waters, with regional fluctuations shaping the Handysize and Ultramax segments. While some areas see rate hikes fueled by tight supply, others struggle with oversupply and sluggish demand. Here’s a breakdown of this week’s market dynamics and what lies ahead.

 

Handysize Market: Navigating Ups and Downs

• US Gulf / US East Coast (USG/USEC): A Market Poised for Balance

The steady influx of cargoes kept momentum going, though fixture volumes didn’t quite reflect the surge in demand. If demand continues to push forward, we could see a more balanced market next week, potentially firming up rates.

• East Coast South America (ECSA): A Tough Week with More Corrections Ahead

A challenging week unfolded as supply outpaced demand, dragging rates lower. With more vessels than cargoes, further rate corrections seem inevitable in the coming days. Owners will be hoping for a shift in demand to ease the downward pressure.

• Continent: A Tale of Two Halves

The first half of the week saw rates climb as last-minute February cargoes sought tonnage amid a tight supply. However, the second half saw the index drop, pulling rates down. Adverse weather has kept many vessels tied up, but as they re-enter the market, expect supply to rise next week.

• Mediterranean: A Market Holding Steady Amid Regional Variations

While the West Med outperformed the East due to a better supply-demand ratio, Eastern Mediterranean (EMED) and Black Sea (BSEA) rates remained stable. Optimism persists that steady activity will continue into next week.

• Middle East Gulf / India (MEG/India): A Slow Drift into Ramadan

With little excitement in the Gulf and India, the market remained quiet. Expect this trend to continue through the Ramadan period as trading activity typically slows down.

• Southeast Asia / Far East (SE Asia/FEast): Struggling to Find Momentum

The southern sector faced downward pressure from limited demand ex-Australia and Indonesia. However, a tight tonnage list helped prevent rates from tumbling further. Meanwhile, North Pacific and Back Haul trips kept the northern sector moving. A demand push is essential to spark any positive movement next week.

 

Ultramax Market: Seeking Stability in an Oversupplied Landscape

• US Gulf / US East Coast (USG/USEC): Owners Cautious as Oversupply Persists

The Ultramax segment saw a split market. Front Haul trips were less desirable, creating a small premium for those willing to take them, while owners were more flexible on Transatlantic trips. However, an oversupply of vessels remains a major hurdle, and a reduction in available tonnage is needed for rates to improve.

• East Coast South America (ECSA): A Cargo Drought Dampens Sentiment

A bearish trend dominated the South Atlantic as most cargoes were already covered and fresh inquiries remained scarce. With more vessels ballasting, particularly in the north, expectations remain weak heading into next week.

• Continent: Stability Amid Grain Cargo Support

Rates held steady as supply and demand found equilibrium. Grain cargoes from the northern Continent injected a dose of optimism, potentially offering a buffer against market downturns.

• Mediterranean: Struggling to Find a Floor

The Med remained under pressure as weak demand and low activity kept rates suppressed. With supply steady and no demand surge in sight, a bearish sentiment prevails for the coming week.

• South Africa (SAFR): A Market in Limbo

Limited activity defined the South African market, though the week ended with a slight increase in fixture volumes. With fewer ballasters than before but weak demand, expect rates to remain stagnant.

• Middle East Gulf / India (MEG/India): A Quiet Market Heading Into Ramadan

Flat rates and minimal rate corrections defined the week. With Ramadan around the corner, expect slow activity and muted market movements.

• Southeast Asia / Far East (SE Asia/FEast): A Sideways Drift

The market moved sideways across both northern and southern regions. North Pacific (NOPAC), Back Haul, and Aussie support provided some stability, but declining Indonesian coal cargoes weighed on the sector. Expect this pattern to continue into next week.

 

The Road Ahead: Market in Need of a Demand Boost

Overall, both Handysize and Ultramax segments are grappling with uneven demand and ongoing supply concerns. While certain regions show glimpses of resilience, others are in dire need of fresh cargo flows to reverse the downward trend. Will next week bring the much-needed demand push? Stay tuned as the market continues its unpredictable journey.

 

 

Disclaimer

This report and the information contained herein are for general information only and does not constitute an investment advice