Handysize Market StrengthPosted on 28 Jan 2021
By Derek Langston, Head of SSY Consultancy & Research
The Handysize 7 TC average assessed by the Baltic Exchange not only reached a 15-month high of $12,550/day on 28 January, but the 4q20 also the marked first quarter when the Handysize average outperformed the Supramax 58k dwt equivalent since the Baltic Exchange began the 38k dwt Handysize index in 2017.
Reflecting its myriad drivers, the causes of the Handysize surge are many and varied, but we’ll highlight a few.
European routes outperformed the sector average in the 4q20, such as the HS2 (Cont trip ECNA), which clambered to an index high of $14,279/day. At the time our broking colleagues commented on changes to grain trading patterns in Europe, with more grain shipped on Handysizes into North Africa from the Baltic Sea as opposed to France, so lifting tonne-mile demand in the sector during the quarter (that pattern has since reverted with more French grain cargoes appearing in the market in January 2021).
Turkish steel scrap imports surged from July 2020 and have subsequently remained robust, with a very high proportion of those cargoes sourced in Europe and carried on Handysize vessels.
With Australia a key market for Handysizes in the Pacific, tighter requirements on crew change from the Australian Maritime Safety Authority (AMSA) in response to the pandemic placed significant restrictions on tonnage availability.
Our colleagues in Australia also highlight the recovery in grain exports from the East Coast after two poor drought-affected years, which have been very active in recent months, benefitting Handysizes. Plus, in recent weeks delays to discharging operations caused by severe weather in China has thinned bulker tonnage availability elsewhere.
In addition, comparative net fleet growth in the Handysize segment last year was slower than in the three other main bulker sectors at 1.4% between January and December, as opposed to 4.0% across the whole dry bulk fleet.
SSY Consultancy & Research
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