Thursday, 02 April 2015 09:32

Market Report - April 2, 2015

No Easter Joy for the markets as one of the most miserable quarters ever for many ship owners trying to earn a living in the dry bulk sector mercifully comes to an end. The Baltic Dry Index closed yesterday on 588 points compared to 598 points last week and 584 points the week previously.

     Capesize       Panamax      Supramax 
Index          455         602         648
Last week         455         602         648
Spot time charter     $ 4,200/day       $ 4,700/day    $ 6,600/day
One week ago    $ 4,300/day   $ 4,700/day      $ 6,800/day  
Thursday, 26 March 2015 22:23

Market Report - March 27, 2015

The bulk market continues to bump along the bottom with very little to drive an improvement this side of a trading break for Easter. The Baltic Dry Index closed yesterday on 598 points compared to 584 points last week and 560 points the week previously.

    Cape Size        Panamax            Supramax 
Index         455         602      648
Last week        407         613      627
Spot time charter      $   4,300/day       $ 4,800/day  $  6,800/day 
One week ago $   4,100/day  $ 4,900/day  $  6,600/day

Containers: Asia-Europe spot rates continue to be in a downward spiral and are now in the low $600’s per TEU. In response, ocean carriers have optimistically announced a General Rate Increase for April 1 of up to $950 per TEU. Trans-Pacific spot rates are also under pressure falling to around $1,750 per FEU from Shanghai to the U.S. West Coast.

Tankers: VLCC spot earnings have hovered around the $50,000 per day mark on the Middle East to Asia trade for most of March thereby providing a degree of unusual market predictability in our business. Thanks to plenty of cargoes to support the supply side, limited fleet growth, and rising ton/miles as more shipments from OPEC countries are made to Asia, rather than to the U.S. things are looking good for a while to come.

Friday, 20 March 2015 00:07

Market Report - March 20, 2015

The best that can be said is that at least the markets went in the right direction this week but not by much. The Baltic Dry Index closed yesterday on 584 points compared to 560 points last week and 561 points the week previously.

    Cape Size        Panamax            Supramax 
Index         407         613      627
Last week        394         586      596
Spot time charter      $   4,100/day       $ 4,900/day  $  6,500/day 
One week ago $   4,800/day  $ 4,700/day  $  6,300/day

Thursday, 12 March 2015 17:16

Market Report - March 13, 2015

352 sad face

    Cape Size        Panamax            Supramax 
Index         394         586      596
Last week        464         583      560
Spot time charter      $   4,100/day       $ 4,700/day  $  6,300/day 
One week ago $   4,800/day  $ 4,700/day  $  5,900/day

Thursday, 05 March 2015 23:42

Market Report - March 6, 2015

So now you have have a Capsize for less than $5,000 per day. Nobody is doing well at these levels other than scrap yards where prices are also in rapid decline as owners look to off-load older tonnage that they can hardly give away in today’s market. The Baltic Dry Index closed yesterday on 561 points compared to 533 points last week and 511 points the week previously.

    Cape Size        Panamax            Supramax 
Index         464         583      560
Last week        525         531      506
Spot time charter      $   4,800/day       $ 4,700/day  $  5,900/day 
One week ago $   5,400/day  $ 4,200/day  $  5,300/day

Friday, 27 February 2015 07:25

Market Report - February 27, 2015

Unsurprisingly given current market conditions, the number of orders placed for bulk carrier new buildings was dramatically down in January. Only 20 new orders were placed compared to 226 in January 2014. The total number of new building orders placed in January was for 109 vessels compared to 695 in January 2014. The Baltic Dry Index remains at historically depressed levels and closed yesterday on 533 points compared to 511 points last week and 540 points the week previously.

    Cape Size        Panamax            Supramax 
Index         525         531      506
Last week        539         516      483
Spot time charter      $   5,400/day       $ 4,200/day  $  5,300/day 
One week ago $   5,300/day  $ 4,100/day  $  5,000/day

Containers: In order to begin the long task of rebuilding some level of business stability,the Transpacific Stabilization Agreement for the eastbound Pacific trade confirmed this week their intent to raise freight rates by $600 per FEU for all shipments effective March 9, and a further $600 per FEU on April 9. 

Thursday, 19 February 2015 22:46

Market Report - February 20, 2015

In advance of the Chinese New Year when all trading in that part of the world takes a time-out, the Baltic Dry Index (BDI) hit yet another record low on Wednesday this week falling to an absolutely miserable 509 points, its lowest ever level since the index began in January 1985. The situation is made worse by prices for market driving iron ore which accounts for about 30% of all dry bulk freight, falling to their lowest level in almost six years.

The Baltic Dry Index fell to 553 points on Wednesday, 1 point below the previous record set in July and August, 1986. The Index closed yesterday at the abysmal level of 511 points compared to 540 points last week and 564 points the week previously.

    Cape Size        Panamax            Supramax 
Index         539         516      483
Last week        652         489      596
Spot time charter      $   5,300/day       $ 4,100/day  $  5,000/day 
One week ago $   6,400/day  $ 3,900/day  $  5,200/day

LNG:  Although there are currently a few spot market exposed LNG carriers anchored off Singapore Mr. Peter Evensen, Chief Executive of Teekay LNG partners, remarked this week that there is an estimated requirement for over 110 standard-size LNG carriers above the existing order book by 2020. In December 2014, the company signed long term time-charter contracts with extension options with Shell for five of the company’s new build LNG carriers and exercised its remaining options with Daewoo Shipbuilding & Marine Engineering (DSME) for the construction of three additional 173,400 cbm capacity vessels. The company also has on order six ice-class LNG carriers and two 173,400 cbm MEGI LNG carrier new builds that are to be taken on long term time charter by Cheniere Marketing of Houston to service that company’s Sabine Pass LNG liquefaction facility in Louisiana. Teekay currently operates 29 LNG carriers.

Thursday, 12 February 2015 16:03

Market Report - February 13, 2015

The global bulk fleet is paying a heavy price for excess capacity. The Baltic Dry Index fell to 553 points on Wednesday this week,  1 point below the previous record set in July and August, 1986. The Index closed yesterday at the still painfully low level of 540 points compared to 564 points last week and 632 points the week previously.

    Cape Size        Panamax            Supramax 
Index         652         489      496
Last week        680         428      538
Spot time charter      $   6,400/day       $ 3,900/day  $  5,200/day 
One week ago $   6,700/day  $ 3,400/day  $  5,600/day

Tankers:  There is increasing speculation that VLCCs are enjoying a short-lived boom before the onset of the seasonally weak spring season, when refineries traditionally close for revamps, inspections or maintenance. Earnings on the benchmark Middle East to Asia trade route continue to provide strong returns in the $60-70,000/day range. 

Thursday, 05 February 2015 22:52

Market Report - February 6, 2015

The 30 year low in the Baltic Dry Index is starting to take its toll on exposed ship owners. This week, privately owned shipping Copenship which had been operating around 50 handysize and handymax bulk carriers filed for bankruptcy in Copenhagen on account of significant losses. They are far from alone in struggling to stay afloat right now and it seems inevitable that other will follow in the near future when rates are not even close to covering daily operating costs. The Index closed yesterday on the ridiculously low level of 564 points compared to 632 points last week and 751 points the week previously.

    Cape Size        Panamax            Supramax 
Index         680         428      538
Last week        725         550      599
Spot time charter      $   6,700/day       $ 3,400/day  $  5,600/day 
One week ago $   7,800/day  $ 4,400/day  $  6,300/day

Containers: Port congestion on the U.S. west coast has boosted the containership charter market to fill scheduling gaps with only around 1% of the fleet currently laid up compared to 3% at this time last year. So far as rates are concerned, the Transpacific Stablization Agreement has reiterated support for at least two, and possibly three, rate rises in the coming weeks with  recommended increases of $600 per FEU on February 9,  $600 per FEU on March 9 and a so far undetermined increase an April.

Tankers: With older large tankers still disappearing off the market for use as storage, it is expected that as much as  7-8% of capacity (equivalent to around 50 VLCCs) will be consumed for this purpose by the summer. Those experts who make a living by studying these things are estimating that this will lift VLCC spot earning by around $12,000 per day to an average of $40-45,000 per day. We shall see. 

Thursday, 29 January 2015 20:57

Market Report - January 30, 2015

Since the beginning of the year, ridiculously low rates have prompted a rush to the scrap yard for aging Capesizes with around 12 already gone and several more on the cusp. Even so, just when we thought that rates could not go much lower, they did with the Baltic Dry Index closing yesterday 632 points compared to  751 points last week and 749 points the week previously.

    Cape Size        Panamax            Supramax 
Index         725         550      599
Last week        965         704      659
Spot time charter      $   7,000/day       $ 4,400/day  $  6,300/day 
One week ago $   8,800/day  $ 5,600/day  $  6,900/day

Containers: Rates from Asia to Northern Europe have improved by more than 20% to $1,250 per TEU over the past week and are still heading north. On the capacity front, Evergreen has announced plans to join the premier league Group with plans to charter 11 x 18,000 TEU vessels from Shoei Kisen Kaisha for delivery between 2018 and 2019.

Tankers: More VLCCs has been chartered for storage of cheap crude. As more VLCCs are used for storage, the global fleet competing on the spot market is shrinking thereby putting owners in a better position to play hard ball on rates. In a sign of continued expectation of market strength, more than 20 VLCCs were taken on extended time charters this month.


Thursday, 22 January 2015 20:33

Market Report - January 23, 2015

Still no new year lift for the dry bulk trades as things remain pretty miserable. The Baltic Dry Index closed yesterday 751 points compared to 749 points last week and 724 points the week previously.

    Cape Size        Panamax            Supramax 
Index         965         704      659
Last week        585         766      735
Spot time charter      $   8,800/day       $ 5,600/day  $  6,900/day 
One week ago $   7,000/day  $ 6,100/day  $  7,700/day

Containers: The aspirations of the Transpacific Stabilization Agreement (TSA) to impose a substantial General Rate Increase in January have largely come to nothing and the pressure is now on to give it another go in February. Therefore, with effect from February 9, the TSA is proposing a $600 per FEU price increase on all container shipments from Asia to the US in anticipation of a rush of pre-Chinese Lunar New Year shipments. The latest Shanghai Containerized Freight Index indicates that freight rates to the US west coast and east coast from Asia are at $2,100 per FEU and $4,700 per FEU respectively.

Tankers: Spot market rates for VLCCs continue to do well in the current environment of low oil prices. Average earnings were steady in the $80-85,000 per day range this week supported by the charter of a rumored 20 or more older vessels for storage. The owners who placed orders for 33 new build VLCCs last year may have read the tea leaves quite well after all it seems.

Thursday, 15 January 2015 18:14

Market Report - January 16, 2015

The Capesize market came somewhat out of intensive care this week thanks to a small spike in demand for vessels to shift coal from Colombia to Europe.  The Baltic Dry Index closed yesterday on 749 points, marginally improved after closing last week on a mere 724 points. 

    Cape Size        Panamax            Supramax 
Index         585         766      735
Last week        335         776      820
Spot time charter      $   7,000/day       $ 6,100/day  $  7,700/day 
One week ago $   4,700/day  $ 6,200/day  $  8,600/day

Bunkers:  Despite the efforts of major ocean carriers to hold the line, bunker prices have fallen to a level where slow steaming is in many cases costing more than it is saving in particular on the major container trades. The saving grace may prove to be that many modern container vessels were built for the now common slower speeds in the range of 18-19 knots and when all is said and done, the industry would suffer enormously if additional capacity were to be released into the market. IFO 380 prices in Singapore and Rotterdam were $265 pmt and $234 pmt respectively, MGO $485 pmt and $448 pmt respectively. MGO in Vancouver was still commanding a premium price at $730 pmt.  

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