Bulk Carrier Shipping Market (‘22/26W)

 On June 23, the dry freight rate index (BDI) closed at 2,331, down 247 points from last Friday. In the bulk carrier market this week, BDI fell due to a sharp decline in Cape, but Panamax and Supramax market conditions remained relatively solid.

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1.     Capesize Weekly Trend

1-1.        Weekly Market Briefings

• Even after the Shanghai lockdown was lifted, construction operations did not return to pre-lockdown levels, and steel demand slumped.
  - Record heavy rains and floods in South China also hindered construction operations. This leads to further deterioration in the margins of the steel mills, leading to a decrease in the blast furnace utilization rate or an increase in the number of steel mills entering into maintenance.
• The Chinese government announced on the 21st that it would speed up the implementation of fiscal policies to stimulate the economy.
  - However, as it is expected that it will take additional time for the government's stimulus policy to lead to the recovery of the real market, it has little effect on the immediate improvement of the negative market atmosphere.

1-2.        Technical analysis

MACD : June 22, 2022, Trade signal (Short position establishment) signal generated. However, in light of the fact that a buy position occurred on June 21, but a shot position was opened again on June 22, it can be seen that the current market is very volatile.

RSI : The RSI started last week at 53 on Monday and ended at 41 on Friday. It is not easy to recommend a position in either direction of ups and downs.

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2.     Panamax Weekly Trend

2-1.        Weekly Market Briefings

 

• Demand for coal imports to China is sluggish due to increased domestic production and increased hydroelectric power generation due to flooding in South China.
  - South China recorded the highest rainfall in 60 years, causing flood damage. On the other hand, in North China, electricity demand is increasing due to a heat wave approaching 40 degrees Celsius, but the increase in demand is met by increasing its own coal production.
• Meanwhile, European coal import demand is expected to increase further in preparation for a reduction in Russian gas supply.
• As the supply of natural gas will also decrease ahead of the ban on European coal imports from Russia in August, sales of South African and Australian coal to Europe are expected to increase for the time being. This is a bullish factor on the Cape and Panamax backhaul routes.

2-1.        Technical analysis

MACD : June 20, 2022, Trade signal (Buy Position establishment) signal occurred. The Panamax market is expected to remain solid for the time being, along with the evidence that China's coal import trade will continue to occur due to the change in the trend of the Panamax market that has occurred for the first time in about a month.

RSI : The Panamax RSI also started at 45 on Monday and closed at 36 on Friday. It is difficult to judge the short-term direction given the recent decline.

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3.     FFA Indications

 As of June 16, looking at the FFA futures trading price in 3Q22, the cape traded at 33,250. It can be seen that this is a slight (0.8%) increase from the previous week's (June 9) transaction price of 33,000. Due to the cape rise, both Panamax and Supramax futures prices rose in the third quarter as of June 16.

 The BDRY recommended in last week's analysis article currently stands at 20.16. If the dry bulk carrier market continues to strengthen this week, BDRY is also expected to rise significantly. Therefore, an additional investment or position holding strategy is recommended.

 

Ref) Bulk Carrier Shipping Market (‘22/25W) (tistory.com)

Bulk Carrier Shipping Market (‘22/25W)

 

Source : Clarkson Research

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