The dry bulk market has kept falling for yet another week, with the industry’s benchmark, the Baltic Dry Index (BDI) losing an additional 4.79% this past week, to reach 1,370 points, thus falling below the 1,400-point mark and reaching its lowest level since early February of 2009. Since the beginning of New Year the BDI has plunged by 17.7% and is down by 56% from January 2010. As it turns out,  the panamax segment suffered the most this week, while Supramaxes and Handysizes reversed their falls and turned positive.

Regarding the Capesize market, the pace of fall seems to have been reduced this week, ending Friday at 1,556 points, losing 2.45% on the week, but with analysts and shipbrokers claiming that the market has bottomed out. Still, Capesizes are earning around $9,000/day which, according to the latest weekly report from Golden Destiny, it seems that it has triggered the scrapping activity in this segment. In a separate report, N.Cotzias Shipping Group said that “this downfall may reverse soon, as the Queensland floods, can act as a recovery for the rates as longer per ton miles for alternative routes that China will expedite to import their needed quantities of hard coking coal. Also with the Chinese New Year holidays approaching we may well experience more hypotonic momentum as orders from China will be less at least during the 2 weeks of festive holidays. However this may lead to a pre-stocking ordering get some fresh stockpiling and that may well act as a defibrillator that will give a burst of energy back in the Cape size segment that is in a very critical condition” said Cotzias. In total though, during the past three months, the BCI (Baltic Capesize Index) has fallen by more than 65% and by 62.6% year-on-year, now falling for 19 straight sessions.

Meanwhile, according to Golden Destiny, on the secondhand market front, the purchase interest has shown some signs of weakness as potential investors seem to wait the desired correction in asset prices. “Despite the negative sentiment in the freight markets this week shows some positive signs for the future of the industry. The encouraging signs are that the ordering activity has been eased off by 80% and the demolition activity has been boosted by 150% from previous week activity. Overall, the week 3/2011 ended with 37 sales reported in the secondhand and demolition market and the highest activity has been witnessed for the first time since January 2009 in the demolition market. In the secondhand market, 17 vessels reported to have changed hands this week equalling a total amount of money invested region US$ 155 million, with 2 transactions reported on private terms. In terms of reported number of transactions, the S&P activity has been marked with a 37% negative w-o-w change and a 41% negative change comparable with previous year’s weekly S&P activity. Investors seem to have lost their appetite for bulk carriers as since the beginning of the year the total number of sales per week is hovering at low levels of less than 10 transactions reported per week. The tanker sector attracted once more most of the buying interest with 7 vessels reported to have changed hands equalling a total investment around of $98 million, around 63% share of the total invested capital in the S&P secondhand market” said the Piraeus-based shipbroker.

In the demolition market, 17 vessels were reported to have been headed t the scrap yards of total deadweight 669,529 tons, with India attracting most activity and still paying even more than $500/ldt. India, Pakistan and China are still taking advantage of the continued absence of Bangladesh. Even though the activity in Pakistan and China has been slowed down the last, there are expectations for an aggressive new year while Bangladesh is still pushing for more permission. It remains to be seen whether the High Court will lift the current ban on the industry. At a similar week in 2009, scrapping activity was standing at the same firming levels, in terms of number of vessels, as 19 vessels equalling a total deadweight of 589,806 tons were reported for scrap but prices were hovering at much lower levels, around $350/ldt for dry and $380/ldt for wet cargo.