Reports: Ship chartered for fuel and port costs

Reports: Ship chartered for fuel and port costs How bad is it in dry bulk shipping market?
   For some investors, the seriousness of the financial crisis was brought home several weeks ago when the demand for three-month treasury bills briefly became so high that yields went into negative territory for the first time since 1940. Investors were willing to pay the Treasury for the privilege of stashing their cash in the government’s virtual mattress.
   Today, publications such as Lloyds List and Tradewinds are reporting something that may be nearly as startling has happened in the dry bulk shipping markets — that a Panamax dry bulker was fixed for $0, with the charterer paying only for bunker fuel and port costs.
   Lloyds said it was unable to get the fixture confirmed by the Baltic Exchange, but the report involved a “1981-built Panamax coming out of the Middle East Gulf for a journey via the West Coast of India, to take a cargo of iron ore to China.” It noted that Panamax charter rates have fallen from more than $50,000 a day in late August.
   The brokerage firm Dahlman Rose said in its transportation note this morning, “There is no change in the direction of the dry bulk market. Rates across all sectors continue to fall hard, even despite a slight increase in activity by major miners over the past few days. Steel prices have begun to gap down by wider margins on a daily basis, and impending steel production cuts globally should continue to impact dry bulk vessel demand.”
   The Baltic Dry Index, which tracks freight rates on for various commodities like coal, iron ore and grain on 26 different routes for different size ships, was set 2,503 Thursday, its lowest point since June 2006, and down dramatically from its all time high of 11,793 on May 20.
   However, newer ships are being chartered at higher rates. Reportedly a 2001 Panamax was recently chartered last week for 11-13 months at $51,000 per day. ' Chris Dupin