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Atlantic Supramax market sees tumultuous Q4 2016



Q4 2016: Dry Bulk Shipping Overview





Q4 2016 - The Atlantic Supramax market saw a tumultuous Q4 2016, with freight levels booming in November as the US Gulf Coast grain exports roared, sending front-haul rates as high as $23,000-$24,000/day in early December.


In voyage rates, the US Gulf Coast to Kashima grains route, basis 50,000 mt hit a high of $41/mt on December 2, the highest level in over two years.


The impact of this strong grains demand was compounded by tight tonnage in the Atlantic as a result of ballasters towards the Pacific earlier in the year, with vessels looking to benefit from strong Chinese and Indian demand for coal.


Then, after having surged nearly 48% since the beginning of October-- from $27.75/mt on October 4 to $41/mt on December 4 -- the Atlantic freight rates began to dip.


Analysis continues below...


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In the second half of December, freight levels slid on a combination of reduced cargo volumes and slower activity ahead of the Christmas holiday period, with pressure for rates to fall further as ballasters seek to escape a now weaker Pacific market, and are expected to arrive in January.


With cheap Panamax rates seen in the market also, Supramaxes will have to battle with their larger cousins also ballasting from the Pacific in order to secure the coveted front-haul grain routes to the East, further depressing rates.


While owners are still fighting any decrease in freight levels, softer rates would be a boon for charterers which have sought to delay cargoes into 2017 where possible, and particularly so in the Turkish and Indian petcoke markets, where high freight has throttled buying interest.


Next route: Capesize freight rates surge for key routes in November







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