GMS Week 43 – Freight Refuses to Stay Down

Last week’s dry freight retreat appeared to offer recycling buyers the opening they had been waiting for. It did not last. The Baltic Dry Index recovered from 2,545 on October 15 to 2,693 on Thursday, October 22, led by improving Capesize earnings. Although still below earlier October levels, the recovery has restored some confidence in continued trading. For recyclers hoping that softer freight would finally release ageing bulkers, the window of opportunity has already narrowed.

The energy market supplied a more worrying development. Renewed Houthi attacks in Saudi Arabia heightened concerns over Middle Eastern oil supplies, prompting Saudi Aramco to evacuate its Dhahran headquarters on Thursday. Brent climbed above USD 115 per barrel intraday on Friday, its highest level since early May, while WTI moved above USD 100. With Gulf shipping risks and elevated insurance costs continuing to disrupt normal trading patterns, ageing tankers still have compelling reasons to remain employed rather than head for recycling.

Dry bulk’s recovery was uneven. Capesizes strengthened to 3,848, while Supramaxes advanced to 1,890. Panamaxes, however, retreated to 2,151, illustrating the different pressures facing individual vessel segments. The broader message remains unchanged: freight earnings and second-hand alternatives continue to discourage owners from releasing sufficient recycling candidates. One week’s decline was encouraging. Its partial reversal has reminded buyers how quickly that encouragement can disappear.

This story was originally published by Hellenic Shipping News. Read the full story at Hellenic Shipping News →