Friday, 15 April 2016 13:57

Market Report - April 15, 2016

Since hitting rock bottom at 290 in mid-February, the BDI has risen 93% to 560.  Drewry reports that this recent rise in performance has been driven by panamaxes first, as the ECSA grain export season got underway.  February is usually the worst month of each year, and perhaps, with more demolition and layups, will again be the low point in earnings for this year.  Global steel production remains very weak, including China, but has recently started to improve.  Australian iron ore exports to Asian customers remain strong while a considerable portion of rising Brazilian exports have been channeled through Vale’s Malaysian blending terminal.  Q1 cargo demand was very depressed, and led to the record low BDI.  Q2 cargo demand is improving in all sizes, partially driven by a strong ECSA grain season.  Somewhat improved global steel raw material demand in Q2 will also help, but nothing exciting.  The fleet is growing, even with very high demolition.  Idle ships have artificially reduced fleet supply, especially in capesize sector.

 

  Capesize    

   Panamax        

  Supramax 

Index 

         949

      727

        525

Two weeks ago

         562

      627

        485

Spot time charter     

 $   7,075/day     

 $ 5,800/day 

$  5,500/day 

Two weeks ago  

 $   4,500/day

 $ 5,000/day 

$  5,100/day

 

Friday, 08 April 2016 12:57

Market Report - April 8, 2016

The Baltic Dry Index is up 62 percent from its record-low reading of 290 on Feb. 11, and just two points below its year-high of 473 on Jan. 4. There has been a significant rise in Capesize rates due to higher steel demand and China restocking iron ore stockpiles.

 

  Capesize    

   Panamax        

  Supramax 

Index 

         562

      627

        485

Two weeks ago

         345

      535

        476

Spot time charter     

 $   4,500/day     

 $ 5,000/day 

$  5,100/day 

Two weeks ago  

 $   3,000/day

 $ 4,275/day 

$  4,980/day

In case you hadn't guessed, shipping consultants Drewery's outlook for the container sector is not positive. Container ships will continue to struggle as with 66 cancelled sailings in February, rates still did not improve or appear to reduce overcapacity.  Radical capacity management decisions are likely to occur on specific trade routes.

Friday, 01 April 2016 10:16

Market Report - April 1, 2016

While the BDI has improved over the last two weeks analyst remain bearish on the short term outlook.  The overall index has gained about 55 percent since touching its lowest of 290 points on Feb. 10.  Capesizes have benefitted from the decision of Chinese steel makers to increase steel production - iron ore account for about a third of seaborne volumes on the larger capesizes, and pricing remains a key factor for dry freight.

 

  Capesize    

   Panamax        

  Supramax 

Index 

         345

      535

        476

Two weeks ago

         197

      463

        449

Spot time charter     

 $   3,000/day     

 $ 4,275/day 

$  4,980/day 

Two weeks ago  

 $   2,040/day

 $ 3,720/day 

$  4,700/day

 

Friday, 18 March 2016 12:51

Market Report - March 18, 2016

The Baltic Dry Index (BDI) ended its one-month rally on Wednesday when it slid one point to close at 393. On Thursday, the index fell another point and continued its drop today - which should not surprise many as China's Containerized Freight Index plunged to record lows. The announcement by the National People’s Congress in China regarding the economic stimulus appears to have caused the recent rally with iron ore prices contributing to the BDI’s rebound. 

 

  Capesize    

   Panamax        

  Supramax 

Index 

         197

      463

        449

Last week

         176

      477

        420

Spot time charter     

 $   2,040/day     

 $ 3,720/day 

$  4,700/day 

Last week

 $   2,170/day

 $ 3,825/day 

$  4,390/day

Today the Journal of Commerce reported that the global idle container ship fleet has soared to an all-time high, with rising numbers of larger ships unemployed, driven by a widening demand-supply gap.  There were 352 unemployed ships of more than 500 20-foot-equivalent unit capacity at the beginning of March, a combined capacity of 1.57 million TEUs, up from 346 vessels of 1.43 million TEUs two weeks earlier.  While this exceeds the previous peak of 1.52 million TEUs at the end of 2009, it represents just 7.8 percent of the total fleet, compared with a record 11.7 percent five years ago, as the fleet has since grown from 13 million TEUs to 20 million TEUs.

Friday, 11 March 2016 10:53

Market Report - March 11, 2016

The Baltic Dry Index has seen a bit of a rally this week as the market is seeing improved vessel demand and a surge in commodity prices over the past week.  However, freight rates continue to remain low due to the oversupply of available vessels.

 

  Capesize    

   Panamax        

  Supramax 

Index 

         176

      477

        420

Last week

         164

      386

        371

Spot time charter     

 $   2,170/day     

 $ 3,825/day 

$  4,390/day 

Last week

 $   2,220/day

 $ 3,100/day 

$  3,875/day

Containers: The Asia-Europe trade are approaching close to all-time lows with the latest Shanghai Containerised Freight Index shows spot market prices from China to northern Europe at a lowly $211 per teu, having fallen by a further 8.7% this week, and those to the Mediterranean slipping 14% to just $203, with rates for either route just $6 and $8 shy of their respective lowest ever values.  

Friday, 04 March 2016 11:23

Market Report - March 4, 2016

While the overall index has risen by three points this week, the capesize market has reached a new all-time low.  

 

  Capesize    

   Panamax        

  Supramax 

Index 

         164

      386

        371

Last week

         182

      346

        328

Spot time charter     

 $   2,220/day     

 $ 3,100/day 

$  3,875/day 

Last week

 $   2,500/day

 $ 2,800/day 

$  3,400/day

 

 

 

Thursday, 25 February 2016 14:12

Market Report - February 26, 2016

The message of over capacity is badly hitting shipyards with only 161 vessels of more than 10,000 tons DWT having been ordered so far this year in comparison to almost 500 new build orders for the same period in 2014, and just over 306 in 2013. In the markets, while still in the basement and Capesizes have plunged to a farcically low level, the overall Baltic Dry Index is at least moving in the right direction to close on Thursday on 325 points compared to 313 points last week and 290 points the week before. 

 

  Capesize    

   Panamax        

  Supramax 

Index 

         182

      346

        328

Last week

         220

      358

        270

Spot time charter     

 $   2,500/day     

 $ 2,800/day 

$  3,400/day 

Last week

 $   2,800/day

 $ 2,900/day 

$  2,800/day

 

 

 

Friday, 19 February 2016 09:13

Market Report - February 19, 2016

While it is early days, the smart people who forecast these things are predicting that close to 60 million tons of dry bulk tonnage will be scrapped this year which sounds a lot but is nowhere near enough to underpin market recovery. However, the Baltic Dry Index actually showed a faint pulse this week in hauling itself back to 313 points compared to 290 points last week and 298 points the week before. 

 

  Capesize    

   Panamax        

  Supramax 

Index 

         220

      358

        270

Last week

         206

      312

        244

Spot time charter     

 $   2,800/day     

 $ 2,900/day 

$  2,800/day 

Last week

 $   2,700/day

 $ 2,500/day 

$  2,500/day

Containers: The economics of the Suez and Panama Canals are under pressure from container carriers at the current low level of bunker prices. In particular, alternative routing between Asia and the US East Coast via the Cape of Good Hope is resulting in a falling number of container ships using the Suez Canal. With a warning from Maersk Line last week that container lines will struggle to make money this year, it seems inevitable that alternatives to expensive canal transits will face scrutiny since Chinese exports were down by 11% and imports by 19% in January compared to the same month in 2014 in contrast to the usual burst of shipping activity ahead of Chinese new year. The official growth rate of China’s economy fell to a 25 year low of 6.9% in 2015 but the international consensus is that this is overstated by at least 2%.

Tankers: With a dip in chartering activity over the Chinese New Year, VLCCs from the Middle East to Asia were trading at $50-55,000 per day this week, quite a bit softer than of late. The first order placed this year for a VLCC was announced with Japan’s Kyoei Tanker Company placing an order for a 311,000 DWT vessel with Japan Marine United Shipyard for delivery in early 2018. The contract price was said to be $93.5 million with the owners taking full advantage of the global shipyard hunger for new orders.

Friday, 12 February 2016 00:17

Market Report - February 12, 2016

With many ship owners reporting 2015 financial results, the extent of the downturn in shipping is hitting home with even the Globe and Mail featuring an article on the issue yesterday in that publication’s financial section. For its part, the Baltic Dry Index closed further down yesterday on 290 points compared to 298 points last week and 325 points the week before. 

 

  Capesize    

   Panamax        

  Supramax 

Index 

         206

      312

        244

Last week

         208

      289

        271

Spot time charter     

 $   2,700/day     

 $ 2,500/day 

$  2,500/day 

Last week

 $   2,700/day

 $ 2,300/day 

$  2,800/day

Thursday, 04 February 2016 21:27

Market Report - February 5, 2016

Dry bulk demand is expected to grow 3.3% on average per year over the next five years according to latest forecasts. Unfortunately, fleet growth is expected to grow at a compound annual rate of 4%, or by 184 million DWT, to reach 959 million DWT. This is having a major impact on the value of modern 2nd hand vessels with, depending on category, prices having fallen between 30 and 50% in the past year alone. Obviously a great time for cash rich speculators to buy, and for sure they will.

No wonder then that day after day the market cost of dry bulk vessels is hitting previously unthinkably low levels with the index now below 300 points.  The Baltic Dry Index closed yesterday on 298 points compared to 325 points last week and 355 points the week before. In this financial environment, it is clear that some over-leveraged owners cannot survive, a likely example being Western Bulk which has had to sell its profitable chartering division to its main shareholder, leaving it with nothing more than a ship holding service and $16m in cash.

 

  Capesize    

   Panamax        

  Supramax 

Index 

         208

      289

        271

Last week

         216

      293

        316

Spot time charter     

 $   2,700/day     

 $ 2,300/day 

$  2,800/day 

Last week

 $   2,900/day

 $ 2,300/day 

$  3,300/day

Friday, 29 January 2016 06:37

Market Report - January 29, 2016

396 Sadface

Still no market relief as daily spot rates fall to the level of the price of a decent racing bike. The Baltic Dry Index closed yesterday on yet another record low of 325 points compared to 355 points last week and 383 points the week before. There won’t be a lot of business class flying at these rates.

 

  Capesize    

   Panamax        

  Supramax 

Index 

         216

      293

        316

Last week

         206

      346

        366

Spot time charter     

 $   2,900/day     

 $ 2,300/day 

$  3,300/day 

Last week

 $   2,800/day

 $ 2,800/day 

$  3,800/day

Tankers: The buoyant tanker market is so far taking the re-entry of Iran to the international market in its stride. In a highly unusual move, news came this week that oil majors are planning to use large new builds, up to VLCC capacity, to ship low sulphur fuel oil from S.E. Asia (likely Singapore) to Europe.  

Friday, 22 January 2016 06:57

Market Report - January 22, 2016

Just when we thought we must surely have hit bottom – bingo and we take another slide into the abysss. The Baltic Dry Index closed yesterday on yet another record low of 355 points compared to 383 points last week and 445 points the week before. There won’t be a lot of business class flying at these rates.

 

  Capesize    

   Panamax        

  Supramax 

Index 

         206

      346

        366

Last week

         225

      388

        402

Spot time charter     

 $   2,800/day     

 $ 2,800/day 

$  3,800/day 

Last week

 $   2,900/day

 $ 3,100/day 

$  4,200/day

Tankers:

395 Tankers

The big news this week is that the Iranian State run National Iranian Tanker Corp (NITC) is again eligible to trade legally after years of cloak and dagger operations including ghost holding companies and multiple changes of ship names and ports of registry. Lloyd’s List Intelligence data reckons that 37 VLCCs have National Iranian Oil Company as their beneficial owner of which about 20 are being used for floating storage NITC also owns five Aframax and 12 Suezmax tankers. Iran is also expected to eventually swing back into action with LPG exports and also to begin development of LNG exports.

Page 4 of 10