The dry bulk market has experienced a tough couple of weeks with plumping charter rates. However, the recent fixtures in the TC-market provide plenty of positive signs for the months ahead. Last week, Alpha Confidence was chartered to Cefo for two years at $21.250, despite the spot rates moving considerably lower. The week concluded at $15.574 in the spot market.

The spot market has experienced a slow-down in the recent weeks, but the period contracts have been resilient to the short-term volatility.
Analysts at Clarksons Platou Securities pointed out that a two-year charter for a seven-year-old Capesize at $21.250 provides a healthy IRR of 12%.
Despite the weak development in the spot market, the historically strong fourth quarter is approaching.

According to Baemar ACM, the fourth quarter has been the strongest in five of the past seven years, with an average outperformance of 71%.
“Judging by FFA pricing the market expects a similar performance this year,” the shipbroker said.

It is worth pointing out that the fourth quarter approaches from a strong market, and a similar development as seen in the previous years will provide very healthy rates towards the year-end.

DnB Markets sector update
The Norwegian bank released their latest sector update at the end of last week, a positive update for the owners of dry bulk vessels with the following highlights:

• Forecasted 11% upside in secondhand values
• 2018-2021e average tonne-mile demand growth of 3,3%
• 2018-2021e average volume growth of 2,8%
• 2018-2021e average fleet growth of 2,6%