Bulk Carrier Shipping Market (‘22/20W)

On May 13, the dry freight rate index (BDI) closed at 3,104, up 386 points from the previous week. In the bulk market, as the cape ship continued to surge, BDI again broke this year's high. However, the Panamax and Supramax lines remained flat as the inflow of new cargo decreased.

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1.     Capesize Weekly Trend

1-1.        Weekly Market Briefings

  

• An increase in import demand due to a decrease in China's iron ore inventory and an increase in demand for coal from Europe and India.
• China's iron ore port inventory decreased by about 20 million tons from its previous peak in February to 140 million tons.
  - In addition to the decrease in the iron ore port inventory, the recent drop in the international iron ore price from over 150 USD per ton at the end of April to the 120 USD level also stimulated the demand for low-priced purchases in China and acted as a factor in increasing cargo volume.
• Considering the Indian government's encouragement of coal imports and low power plant inventories, coal supply to India will continue to remain solid in June and will serve as a major driver of the dry bulk carrier market for the time being.
  - However, if the international coal price rises further, the increase in imports is expected to be limited due to the expansion of Indian coal purchases.
  - The demand environment this week is generally good, but there is a possibility of some adjustment due to the increased burden on shippers for the recent two-week rise.

 

 1-2.        Technical analysis

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

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RSI : As of May 13, 22, RSI is located above 85. It is a step above the upper limit (70), indicating that it is located at a short-term high. Therefore, there is a possibility of a downward revision depending on the perception of a short-term high.

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2.     Panamax Weekly Trend

2-1.        Weekly Market Briefings

 

• Like the Cape, it rose mainly in the Pacific thanks to strong coal demand for India and Europe, but turned downward due to the weak Atlantic Ocean due to the slowing inflow of USG grain traffic in the second half of the week.
• Since the harvest of new soybean crops in Brazil has been virtually completed (95% harvest on the 5th), shipments are in full swing
  - As a result, soybean purchases from China and other major importers shifted to Latin America, and US soybean exports contracted.
  - In the second week of May, USG grain export quarantine volume was 1.06 million tons, the lowest since November last year.
• The Pacific region is expected to remain robust this week on the back of South American grain and Australian and Southeast Asian coal demand.
  - On the other hand, in the Atlantic Ocean, downward pressure is expected to increase due to sluggish demand for USG and the influence of the chartered charter market, which is higher than that of the Cape.

  

2-2.        Technical analysis

MACD : May 05, 2022, Trade signal (Buy Position establishment) signal occurred.

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RSI : As of 13 May 22, RSI is located around 66. It is close to the upper limit (70), but there is still room for further upside.

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3.     FFA Indications

 

 As of May 12, the cape 5TC spot price recorded 32,885 while the Q3 price of 22 was traded at 36,475, down from the previous week (38,375 trades). The difference between Spot and future transactions is only $3,500, so there does not appear to be any further upside. Also, both Panamax and Supramax traded at lower Q3 prices than last week. This seems to be taking a slightly conservative stance on the Q3 market situation following a short-term surge.

BDRY closed at 23.12 on the 13th. Although it exceeded $24 in the middle of the week, it appears that BDRY also declined slightly due to the fatigue of participants in the 3Q market following the recent surge. From a mid- to long-term point of view, it is still a good investment, but there is a possibility of a slight decline for the time being due to a short-term surge.

 

Ref) Bulk Carrier Shipping Market (‘22/19W) (tistory.com)

Bulk Carrier Shipping Market (‘22/19W)

 

Source : Clarkson Research

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