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.
|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 $1,250 per TEU over the past week and are still heading north. On the capacity front, Evergreen has announced plans to join the premier league Group with plans to charter 11 x 18,000 TEU vessels from Shoei Kisen Kaisha for delivery between 2018 and 2019.
Tankers: More VLCCs has been chartered for storage of cheap crude. As more VLCCs are used for storage, the global fleet competing on the spot market is shrinking thereby putting owners in a better position to play hard ball on rates. In a sign of continued expectation of market strength, more than 20 VLCCs were taken on extended time charters this month.
Still no new year lift for the dry bulk trades as things remain pretty miserable. The Baltic Dry Index closed yesterday 751 points compared to 749 points last week and 724 points the week previously.
|Spot time charter||$ 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 $80-85,000 per day range this week supported by the charter of a rumored 20 or more older vessels for storage. The owners who placed orders for 33 new build VLCCs last year may have read the tea leaves quite well after all it seems.
The Capesize market came somewhat out of intensive care this week thanks to a small spike in demand for vessels to shift coal from Colombia to Europe. The Baltic Dry Index closed yesterday on 749 points, marginally improved after closing last week on a mere 724 points.
|Spot time charter||$ 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 $730 pmt.
If the Baltic Dry Index was in bad shape before the holidays, it is now on life support. After closing on 814 points on December 19, the index closed yesterday on a mere 724 points taking us right back to the low levels of seven years ago following the 2008 market crash.
|Spot time charter||$ 4,700/day||$ 6,200/day||$ 8,600/day|
|One week ago||$ 5,100/day||$ 7,400/day||$ 7,700/day|
Tankers: The large tanker segment continues to reap the harvest of demand for oil at less than $50 per barrel. Rates for VLCCs are hovering in the $70-75,000/day range which is below the pre-Christmas $90,000/day range but still good news in comparison to the last six years of pain. There is also every prospect that older vessels will find themselves chartered for storage once on-shore capacity in the major consuming countries is full.
After last week’s declines, the Capesize market is suffering a Christmas melt down. The Baltic Dry Index closed on Thursday on 814 points compared to 887 points last week and 1019 points the week previously.
|Spot time charter||$ 5,100/day||$ 7,400/day||$ 9,700/day|
|One week ago||$ 6,800/day||$ 8,200/day||$ 10,000/day|
Tankers: Daily spot market earnings for VLCC’s continue to climb and this week found themselves in the $90-$100,000 per day range for a voyage from the Middle East to Asia – a level last seen in the giddy days of 2008. Not wishing to throw cold water on a good news story but there are 92 VLCCs on order which if not balanced out by scrapping of older tonnage could soon begin to undermine improved earnings.
There is no Christmas cheer whatsoever in the Capesize market which this week experienced a bloodbath. The Baltic Dry Index closed on Thursday on 887 points compared to 1019 points last week and 1187 points the week previously.
|Spot time charter||$ 6,800/day||$ 8,200/day||$ 10,000/day|
|One week ago||$ 19,700/day||$ 8,800/day||$ 10,300/day|
The Baltic Dry Index closed on Thursday on 1019 points compared to 1187 points last week and 1332 points the week previously.
|Spot time charter||$ 19,700/day||$ 8,800/day||$ 10,200/day|
|One week ago||$ 18,900/day||$ 8,800/day||$ 10,300/day|
Containers: The 15 member TransPacific Stabilization Agreement has announced a much needed General Rate Increase (GRI) of $1,000 per FEU effective December 15 on all cargo from all origins and destinations - the highest in recent TSA history. In addition, the group will impose any port congestion surcharges that carriers deem necessary.
Tankers: The oil glut continues to encourage buyers to stock up thereby keeping larger tankers busy. VLCCs are slightly off last week’s rates but were still hovering in the $60,000/day range this week – a big improvement on recent months.
Under Chinese pressure on producers to reduce prices, iron ore was this week trading below $70 for the first time in five years. This signals another period of misery for Capsizes which has pulled down the Baltic Dry Index this week to close on Thursday on 1187 points compared to 1332 points last week and 1264 points the week previously.
|Spot time charter||$ 18,5900/day||$ 8,800/day||$ 10,300/day|
|One week ago||$ 23,500/day||$ 8,500/day||$ 9,700/day|
Containers: Despite FMC pressure to the contrary, some ocean carriers this week reinstated port congestion surcharges for container imports into the U.S. West Coast. Fees average $800 per TEU and $1,000 per FEU.
Tankers: VLCCs had an encouraging week with a sudden flurry of activity lifting rates from the Middle East to China to more than $50,000/day in some cases. Product tankers also gained a lift in the Atlantic thanks to cold weather ahead of the Thanksgiving long weekend in the U.S.
The Baltic Dry Indexwas largely treading water this week to close on Thursday on 1332 points compared to 1264 points last week and 1436 points the week previously.
|Spot time charter||$ 23,500/day||$ 8,500/day||$ 9,700/day|
|One week ago||$ 21,200/day||$ 8,900/day||$ 9,100/day|
Containers: Given the extent of the issues they are facing, ocean carriers have been announcing surcharges to compensate for delays at USWC ports but this has caught the attention of the Federal Maritime Commission which has reminding the carriers that they cannot impose congestion surcharges without giving customers 30-days notice. The Transpacific Stabilization Agreement had last weekend announced an immediate $1,000 per FEU and $800 per TEU congestion surcharge but this is now on hold.
Tankers: Owners fortunate enough to have Aframax and Suezmax tonnage in the Mediterranean were doing exceptionally well this week. Tankers are reaping the rewards of a regional boom where spot earnings are reaching $80-90,000 per day compared to only $35,000 per day last week. It surely won’t last so enjoy while you can.
The shine came off Capesizes this week resulting in the Baltic Dry Index closing on Thursday on 1264 points compared to 1436 points last week and 1424 points the week previously.
|Spot time charter||$ 21,200/day||$ 8,900/day||$ 9,100/day|
|One week ago||$ 26,500/day||$ 9,600/day||$ 9,300/day|
The Baltic Dry Index managed to consolidate last week’s gains to close on Thursday on 1436 points compared to 1424 points last week and 1155 points the week previously.
|Spot time charter||$ 26,500/day||$ 9,600/day||$ 9,300/day|
|One week ago||$ 25,600/day||$ 9,800/day||$ 9,300/day|
Members of the Transpacific Stabilization Agreement are planning to increase low-sulphur charges for westbound trades from January 1 when the new ECA standards kick in by recommending a charge of $47 per FEU and $38 per TEU from the US West Coast, and $95 per FU and $76 per YEU from the East and Gulf Coasts.
Having forced down the prices of iron ore and coal, China is again buying and Capesizes are in lift off mode as there is no stopping the market at the top end. The Baltic Dry Index closed on Thursday on 1424 points compared to 1155 points last week and 963 points the week previously.
|Spot time charter||$ 25,600/day||$ 9,800/day||$ 9,300/day|
|One week ago||$ 16,400/day||$ 8,800/day||$ 9,500/day|
Tankers: On the back of heavy Chinese buying to take advantage of the current low price of oil, VLCCs spot rates to Asia this week climbed by around $9,000/day to the $45-50,000/day range – a major improvement on the rates at the beginning of October. China’s oil demand in September was 42.3m tons, or an average of 10.3m barrels per day — up 7.4% from the same month a year ago, according to Platts.
The Baltic Dry Index gained a shot in the arm from a sudden spurt in Capesize rates this week to close on Thursday on 1155 points compared to 963 points last week and 974 points the week previously.
|Spot time charter||$ 16,405/day||$ 8,801/day||$ 9,471/day|
|One week ago||$ 10,300/day||$ 6,900/day||$ 10,100/day|
Containers: The Transpacific Stabilization Agreement is to raise rates between mid-November and early December on account of “congested US port terminals, harbour and over-the-road truck driver shortages, slower trains and longer rail terminal dwell times”. Increases of $100 per FEU and $90 per TEU are to take effect on or around November 15but by no later than December 1. The organizationhas also announced its recommended low sulphur fuel surcharge effective January 1 2015 of $67 per FEU to the US east coast and $53 per FEU to the west coast. Charges per TEU will be assessed at 90% of the FEU levels.
Still on life-support, the Baltic Dry Index closed on Thursday on 963 points compared to 974 points last week and 1041 points the week previously.
|Spot time charter||$ 10,300/day||$ 6,900/day||$ 10,100/day|
|One week ago||$ 10,500/day||$ 6,900/day||$ 10,300/day|
Bunkers: Oil prices are at their lowest in about 22 months due in part to large U.S. stockpiles. Oil futures have largely collapsed as shale supplies boost U.S. output to the highest level in almost 30 years at a time of weakening global demand. OPEC’s response has been to cut prices in an effort to preserve market share but the group is not scheduled to meet to discuss a coordinated strategy until November 27 in Vienna.
Containers: The world’s container fleet continues to grow in both capacity and number of ships. In November there were an additional 12 ships in the fleet, equating to an additional 82,000 TEU of capacity. This took the world’s container fleet to 5,035 vessels comprising a total of 17.8m TEU.
The Baltic Dry Index has again dipped below its benchmark 1000 points, closing on Thursday on 974 points compared to 1041 points last week and 1038 points the week previously. Last week’s holiday in China for National Day celebrations seems to have done shipping markets no favors at all.
|Spot time charter||$ 10,500/day||$ 6,900/day||$ 10,300/day|
|One week ago||$ 12,200/day||$ 7,000/day||$ 10,800/day|
Containers: The US Federal Maritime Commission (FMC) this week announced approval of the 2M Alliance between Maersk Line and Mediterranean Shipping Co. The US was the only jurisdiction in which the new alliance was required to gain formal regulatory approval, however in order to pacify shippers, the FMC is to impose reporting requirements on the two carriers in order to monitor the implementation of the agreement.
The Baltic Dry Index remains completely directionless closing on Thursday on 1041 points compared to 1038 points last week and 1089 points the week previously.
|Spot time charter||$ 12,200/day||$ 7,000/day||$ 10,800/day|
|One week ago||$ 12,600/day||$ 6,400/day||$ 10,900/day|
Market sentiment remains weak as despite record levels of global trade, there are just too many ships chasing it. The Baltic Dry Index closed on Thursday on 1038 points compared to 1089 points last week and 1186 points the week previously.
|Spot time charter||$ 12,600/day||$ 6,400/day||$ 10,900/day|
|One week ago||$ 14,900/day||$ 6,600/day||$ 10,800/day|