Bulk Carrier Shipping Market (‘22/18W)

 As of April 29, the Baltic Freight Index (BDI), which indicates the freight rate for bulk carriers, was 2,404 points, up 4.2% from the previous week. This is because freight rates for large ships continued to rise amid an increase in iron ore trade ahead of the holidays between Japan and China, and small ships also turned upward.

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 1.     Capesize Weekly Trend

1-1.        Weekly Market Briefings

• No progress has been made in China's containment of COVID-19, and demand for steel and iron ore continues to stagnate.
  - Although the lockdown in Tangshan has been partially eased and the logistics situation has improved slightly, movement between regions is still restricted.
  - Efforts are being made to improve logistics in the Shanghai area, such as the resumption of operation of some warehouses, but there are still more areas that have been shut down.
• Chinese President Xi Jinping announced government financial support for infrastructure construction in his speech on the 26th.
  - Overcoming the economic recession due to the zero-corona policy and paving the way for this year's growth target of 5.5%.
  - Demand for raw materials is expected to increase in the second half of this year due to China's increased infrastructure investment.
  - Brazil's Vale Company also plans to finish maintenance of major mines in the first half of this year and increase iron ore production by operating additional mines in the second half of this year.

1-2.        Technical analysis

MACD : April 22, 2022, Trade signal (Long position establishment) signal generated.

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2.     Panamax Weekly Trend

2-1.        Weekly Market Briefings

• Freight rates fell due to sluggish demand for coal and grain due to China's continued lockdown and continued oversupply of ships in the Pacific.
  - As the Chinese government's policy to cap the price of domestic coal comes into effect on May 1, Chinese coal importers are reluctant to engage in new transactions to determine the impact.
• Meanwhile, since Qinhuangdao, the largest coal shipping port in North China, entered a lockdown last week, it is expected that disruption to domestic shipments of Chinese coal (North China → East and South China) will be inevitable for the time being.
  - In addition, the Chinese government will eliminate tariffs on imported coal by March next year. As coal from Indonesia is already under tariff-free and imports from Australia are banned, Russian coal is expected to benefit.

2-2.        Technical analysis

MACD : March 31, 2022, Trade signal (Short Position establishment) signal occurred.

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3.     FFA Indications

  As of April 28, the average price of Cape 5TC was 17,821, which is a sharp increase of about 31% compared to the average price of 13,571 on April 21st. On the other hand, the price of Panamax 5TC fell slightly, and the price of Supramax 10TC maintained a strong trend. In other words, the current rise in BDI is being driven by the Cape market conditions. However, compared to the last Q3 price, Cape/Panamax/Supramax all traded at a slightly lower rate. If Q3 forecasts continue to fall short of expectations, long positions will have to be closed after buying.

Compared to the price at the time of the last BDRY recommendation (4/22 closed price: 22.31), the current price (4/30 closed price: 21.48) has decreased slightly, but given that the Cape market is rebounding, it is expected to continue rising. I will still maintain the stance recommended by BDRY.

Ref) Bulk Carrier Shipping Market (‘22/17W) (tistory.com)

Bulk Carrier Shipping Market (‘22/17W)

 

 

Source : Clarkson Research

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