In our weekly newsletter released on 13 April 2022, we made the following statement in our ‘Q1-2022 Review’ on how the party in sub-Capes (Panamax Supramax Handysize) will have an finite period to it.
“…In March, drybulk freight markets were in a sweet spot whereby the modest loss in export volumes from Ukraine and Russia were offset by main importers now buying from alternative suppliers from further afield. This led to greater ton-miles and more backhaul trades that improved the fleet utilization. On the other hand, charterers need to quote higher to tempt those willing shipowners to load Russian cargoes (especially from Black Sea) and pay higher if they want to convince shipowners to discharge at European ports…In addition, the drybulk fleet was unable to react promptly to this sudden change in trade dynamics.
But as shipowners repositioned their vessels toward other cargo-loading regions, coupled with Capesize vessels actively courting smaller- sized stems, this “sugar rush” in spot rates (for sub-Cape) should taper off by late April or early May. By the time of writing, we are in the spring shoulder season of coal consumption for North Asia, a typical lull period for freight, which is not certainty helping the drybulk’ cause…”
While we had been right that geared bulkers rates would eventually correct in the short-term, it took until late May-22 before we start witnessing the cracks. An indication on how tough it is to ‘time’ market outlooks, especially when it comes to shipping when patience is needed to recover from a party hangover!
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