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.

Friday, 15 January 2016 00:01

Market Report - January 15, 2016

China quietly imported a record level of iron ore in 2015, 953 million tons, including 96 million tons in December alone. In the meantime, just when we thought things could not get much worse in the markets – they have. The Baltic Dry Index closed yesterday on a new record low of 383 points compared to 445 points last week. The index has never previously dipped below 400 points.

 

  Capesize    

   Panamax        

  Supramax 

Index 

         225

       388

        402

Last week

         399

       450

        436

Spot time charter     

 $   2,900/day     

 $ 3,100/day 

$  4,200/day 

Last week

 $   4,200/day

 $ 3,600/day 

$  4,600/day

Tankers: Spot rates for VLCCs from the Gulf to Asia have slipped about 30% over the past couple of weeks to around $70,000/day. The IEA has forecast oil demand growth this year of 1.2m barrels per day, which equates to demand for another 30 VLCCs. On the down side, approximately 60 VLCCs are scheduled to be delivered this year.Product  tankers are meanwhile faring reasonably well with rates up to around $24,000/day thanks the onset of winter in the northern hemisphere driving gasoline demand in the Atlantic basin and demand for light distillate in East Asia.

Friday, 08 January 2016 00:01

Market Report - January 8, 2016

First indications are that something around 360 dry bulk vessels of around 28 million tons of carrying capacity or 3.5% of the world dry bulk fleet were scrapped in 2015, just slightly below the record numbers in 2012. Approximately 75% of this took place in the first half of the year when scrap prices were reasonable but things slowed up considerably in the second half despite the appalling trading conditions. At the same time, dry bulk deliveries in 2015 totalled almost 48 million tonsmeaning that a program of far more aggressive scrapping is needed to bring the market back to some sort of balance.

In the meantime, the Baltic Dry Index has smashed all records for weakness. The index closed yesterday on a new record low  of only 445 points.

 

  Cape Size    

   Panamax        

  Supramax 

Index 

         399

       450

        436

December 18th

         524

       421

        448

Spot time charter     

 $   4,200/day     

 $ 3,600/day 

$  4,600/day 

December 18th

 $   5,000/day

 $ 3,400/day 

$  4,700/day

Containers: Around 300 container ships comprising 750,000 TEU or approximately 6% of the world fleet are now inactive. The numbers would undoubtedly have been higher were it not for an aggressive program of scrapping older vessels, the youngest of which was however only 13 years old. Despite weak scrap prices, older Panamax container ships are favoured candidates for the blow torch. 

 

Friday, 18 December 2015 09:10

Market Report - December 18, 2015

There is no Christmas cheer whatsoever in the markets this week. Lead by a precipitous drop in demand for Capesizes, the Baltic Dry Index hit a rock bottom record low since first opening back in 1985. The index closed yesterday on 471 points compared to 534 points last week and 574 points the week before. 

 

  Cape Size    

   Panamax        

  Supramax 

Index 

         524

       421

        448

Last week

         824

       408

        455

Spot time charter     

 $   5,000/day     

 $ 3,400/day 

$  4,700/day 

One week ago

 $   7,200/day

 $ 3,300/day 

$  4,800/day

 

Friday, 11 December 2015 10:24

Market Report - December 11, 2015

If there is to be any sort of stimulus to the dry bulk market ahead of the Christmas and New Year holidays, it’s a long time coming. The Baltic Dry Index closed down yesterday on 534 points compared to 574 points last week and 562 points the week before. 

 

  Cape Size    

   Panamax        

  Supramax 

Index 

         824

       408

        455

Last week

         931

       438

        470

Spot time charter     

 $   7,200/day     

 $ 3,300/day 

$  4,800/day 

One week ago

 $   8,200/day

 $ 3,500/day 

$  4,900/day

Tankers:  The good news for tankers is that the 168th summit of OPEC oil ministers in Vienna last week failed to make any reference to an official production ceiling target. Although largely ignored, the existing official production ceiling is 30 million barrels per day. At a press conference, the President of OPEC, Nigeria's oil minister explained that a key factor in OPEC’s decision was is the expected return of Iran to international oil markets and uncertainty over oil production in the United States where production is falling on account of low prices.  

Meanwhile, VLCC spot rates from the Middle East to Asia continue to enjoy their time in the spotlight at levels of 110-115,000/day, the best the market for VLCCs for seven years. Bunker prices sank to a level not seen for almost 11 years this week with IFO 380 being quoted in Singapore, the world’s single largest bunker hub, at $183/ton.

Friday, 04 December 2015 00:10

Market Report - December 4, 2015

Panamaxes are taking the brunt with the spot market still in the tank, the Baltic Dry Index closing yesterday on 574 points compared to 562 points last week and 504 points the week before. Much of the commentary points towards a continuing “batten down the hatches” year in 2016 with the first glimmers of a recovery unlikely before 2017.

 

  Cape Size    

   Panamax        

  Supramax 

Index 

         931

       438

        470

Last week

         898

       459

        467

Spot time charter     

 $   8,200/day     

 $ 3,500/day 

$  4,900/day 

One week ago

 $   7,700/day

 $ 3,700/day 

$  4,900/day

Tankers: VLCC spot rates continue to hold up in the low W60s with average earnings of around $71,000 per day in November on the Middle East to Asia trade. Having said that, modern VLCCs were again this week pushing the $100,000 per day mark as the onset of northern winter begins to cut into oil stockpiles.

Friday, 27 November 2015 08:44

Market Report - November 27, 2015

You have to be thankful for what you can get right now. The Baltic Dry Index has pulled back from last week’s near total collapse to close yesterday on 562 points compared to 504 points last week and 579 points the week before. 

 

  Cape Size    

   Panamax        

  Supramax 

Index 

         898

       459

        467

Last week

         619

       468

        479

Spot time charter     

 $   7,700/day     

 $ 3,700/day 

$  4,900/day 

One week ago

 $   5,300/day

 $ 3,700/day 

$  5,000/day

Containers: Moves to lay up vessels are rapidly gaining momentum with the size of the idle fleet growing by more than 50% in October and November, according to our friendly watch dog analysts at Drewry. A total of 900,000 TEU of capacity is now unemployed (idle for 14 days or more) accounting for 4.6% of the world fleet and not limited to chartered vessels. The peak in 2009 reached 11% of capacity. 

Friday, 20 November 2015 00:05

Market Report - November 20, 2015

The Baltic Dry Index is at a historically lowest ever level having closed yesterday on 504 points compared to 579 points last week and 640 points the week before. These levels are well below daily operating costs in all sectors of dry bulk, never mind repayment of financing. There are certain to be many company failures if this  continues and right now it’s hard to see where any recovery will come from.

 

  Cape Size    

   Panamax        

  Supramax 

Index 

         619

       468

        479

Last week

         881

       5348

        533

Spot time charter     

 $   5,300/day     

 $ 5,300/day 

$  5,000/day 

One week ago

 $   6,700/day

 $ 4,300/day 

$  5,600/day

Friday, 13 November 2015 00:05

Market Report - November 13, 2015

The Baltic Dry Index is now in market crisis territory having closed yesterday on 579 points compared to 640 points last week and 728 points the week before. This is the lowest point for the BDI since we first initiated the Chamber’s weekly newsletter.

 

  Cape Size    

   Panamax        

  Supramax 

Index 

         881

       534

        533

Last week

       1002

       618

        584

Spot time charter     

 $   6,700/day     

 $ 4,400/day 

$  5,600/day 

One week ago

 $   7,400/day

 $ 4,900/day 

$  6,100/day

Friday, 06 November 2015 00:05

Market Report - November 6, 2015

The Baltic Dry Index plummeted over the past few days and closed yesterday on 640 points compared to 728 points last week and 786 points the week before.

 

  Cape Size    

   Panamax        

  Supramax 

Index 

       1002

       618

        584

Last week

       1254

       682

        633

Spot time charter     

 $   7,400/day     

 $ 4,900/day 

$  6,100/day 

One week ago

 $   9,200/day

 $ 5,500/day 

$  6,600/day

Containers: Spot rates from Asia to Northern Europe underwent a major recovery last week and for the first time in a long time were pushing $1,000 per TEU. Even so, rates are still around 25% below where they were this time last year. Spot rates on the Trans-Pacific trades also improved to around $1,400 per TEU, close to a 20% improvement. The recovery coincided with carriers withdrawing surplus capacity and cancelling a number of sailings but it remains to be seen just how sustainable the rates will be – suffice to say that nobody is very optimistic.

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