The Baltic Dry Index continued a weeklong run to reach a two-year high on increasing dry-bulk charter activity, particularly for smaller bulk cargoes in the Atlantic Basin.
The broad index of bulker freight rates reached 1,257 on Friday, capping a 18% rise over the course of the week and the longest sustained period over 1,000 since late summer 2015, when the index peaked at 1,222 before making a long slide downward.
Capesize chartering activity in the Atlantic Basin, particularly for steel and coal cargoes, has been a big driver of the index through much of the week. But sub-capesize markets were seeing most of the strength today.
The Baltic’s assessment for average supramax freight rates was up 8% at $8456 per day. Average panamax rates were up 2% to $11,074 per day. Average capesize rates were down slightly, but still held at the $19,000 per day level.
Owner and operator relets are driving up rates on smaller bulkers today, with one broker describing the rate action as driven by “flipping tonnage.”
Charterers who have grain, coal or scrap metal cargoes set to be lifted in the coming weeks are now nominating ships, causing them to scramble to find available tonnage, and having to pay up in the process.
“Operators are covering their requirements,” one European-based broker said. “They are being forced to nominate within their laycan. They are forced to take whatever ship is available.”
Grain trader Bunge relet the 80,635-dwt Bilbao (built 2015) to an undisclosed customer for a late November US-Europe transit at $17,500 per day. Starboard Shipping & Trading also relet the 77,000-dwt Bellatrix (built 2006) to an undisclosed customer for the Indonesia-to-India voyage at $10,000 per day.
Atlantic Basin is seeing more activity than in the Pacific Basin. But the broker said some operators are looking at three-to-six month period charters in the Pacific in order to cover their requirements.
