Bulk Carrier Shipping Market (‘22/27W)

On July 1, the Baltic Dry Index (BDI) closed at 2,214, down 26 points from the previous day. In the last bulk market, Cape Ships recorded a decline on the last day, but showed an atmosphere of revival as the inflow of new cargo from both waters increased, such as showing a surge in the middle of the week. Small and mid-cap stocks declined in the second half of the week, but did not reach a rebound.

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 1.     Capesize Weekly Trend

1-1.        Weekly Market Briefings

◦ The People's Bank of China announced that "Financial policies for a comprehensive economic recovery will be implemented in accordance with market conditions, and structural policy support such as support for small and medium-sized enterprises and eco-friendly transition will also be implemented."
- NDRC, in response to concerns over China's economic slowdown this year, declared that it will be possible to achieve high growth rates this year through government support for key industries such as infrastructure construction, automobiles, and home appliances.

◦ In June of this year, the issuance of special purpose bonds by local governments in China reached a record high of 1.93 trillion yuan, raising expectations for government-led economic stimulus.
- However, it usually takes several months for the actual infrastructure construction to start, so the immediate improvement in the volume of cargo is insignificant.
- However, in anticipation of China's economic stimulus measures, trading of iron ore for August shipments is carried out steadily, and supply and demand is expected to improve sooner due to an increase in new trade volume.

 

1-2.        Technical analysis

MACD : June 22, 2022, Trade signal (Short position establishment) signal generated.

RSI : The RSI started last week at 40 on Monday and ended at 44 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

◦ Continued stagnation in the Asian market due to sluggish coal demand for China and India.
- Coal stocks in ports in North China are above the normal level, while hydroelectric power generation has also increased due to heavy rains in South China.

◦ Demand for fuel coals destined for Europe is expected to increase, but the current inventory at the port near Rotterdam remains high, which does not lead to an immediate increase in cargo volume.
- However, the supply disruption caused by the increase in the number of coal unloading ships is expected to act as a sporadic support factor.
- Expected to increase coal demand and increase cargo volume when the heat season begins in earnest after the end of the northern hemisphere rainy season

 

2-2.        Technical analysis

MACD : June 28, 2022, Trade signal (Short Position establishment) signal occurred.

RSI : The Panamax RSI also started at 33 on Monday and closed at 26 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 30, looking at the FFA futures trading price in 3Q22, the cape traded at 28,500. It can be seen that this is a slight decrease (-4.2%) from the previous week's (June 23) trading price of 29,750. In the case of Supramax, the 3Q futures price is still lower in backwardation. Therefore, we recommend a strategy that responds to a short position rather than a long one.

 

Ref) Bulk Carrier Shipping Market (‘22/26W) (tistory.com)

Bulk Carrier Shipping Market (‘22/26W)

 

Source : Clarkson Research

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