Shorthaul from Australia sign of capesize comeback

Newly-appointed Lauritzen Bulkers president Ejner Bonderup – who took over last week after 21 years in the company – said that charterers were beginning to show signs of recovery and had begun signing contracts for the latter part of the year, particularly in the sub-35,000 dwt handysize sector.
The capesize dry bulk sector had also begun to see more trade activity but only for short voyages, mostly between Australia and China, Mr Bonderup said.
“What we would like to see is a more normal picture of what is going on with the capesize business such as some iron ore flowing out of Brazil again,” he said.
The positive news emerged as on May 6 the Baltic Dry Index jumped 168 points, or 8.9%, largely on Chinese demand for iron ore and coal.
It was the largest daily upwards move of the index for more than three months.
“The fact that some of our customers are willing to lock themselves in for business towards the end of 2009 is a clear indication to me that we are in for some stability,” Mr Bonderup said.
The Danish company, a division of the Copenhagen-based J Lauritzen Group, operates a fleet of about 80 vessels, the majority of which are handysizes.
“We have come out of this deep depression in handysize because there are companies needing cargo moved from a to b and it has become clear in their mindset that they need to do business,” he said.
However, he said charterers would stay away from long charter chains which have shown vulnerability over the last few months as shippers and charterers failed to find necessary credit.
“It is a big issue,” he said.
“Many cargo owners ask to have a list of owners and charterers in the chain and if they do not like a name on the list, they will not take the risk.”
Handysize bulkers are seen as safer compared with the larger, riskier vessels.
Rates have risen from US$1,000 a day at the end of last year to a recent high of US$10,000 a day.
“This is a huge increase – not as much as we were used to, but quite a big increase and a clear reflection that the market is more in balance now,” he said.
“If we reflect what has happened since November when global trade came to a standstill, all our normal customers in handysize are back in business, particularly in scrap, fertiliser, grain, coke and coal.
“They have put their finances in order, opened letters of credit and a level of trading and activity is there again.”