Friday, 28 August 2015 10:08

Market Report - August 28, 2015

The bottom fell out of the previously recovering Capesize market this week resulting in the Baltic Dry Index closing well down yesterday on 905 points compared to 1014 points last week and 1046 points the week before.

 

  Cape Size    

   Panamax        

  Supramax 

Index 

       1051

       1000

        924

Last week

       1679

       1052

        901

Spot time charter     

 $   8,100/day     

 $ 8,000/day 

$  9,700/day 

One week ago

 $ 12,000/day

 $ 8,400/day 

$  9,700/day

Bunkers:  Turmoil across the world’s stock markets this week had a knock on impact on oil and bunker prices. In Singapore, the world’s largest bunker supplier, prices fell to a 10 year low  with CST380 heavy fuel oil hovering around $205 per ton. Prices in Singapore have now fallen a massive $375.50 pmt (64%) since exactly one year ago offering at least some relief against continuing weak global freight rates.

Thursday, 20 August 2015 16:12

Market Report - August 21, 2015

Pressure on Capesize rates were the determining issue again this week as the Baltic Dry Index closed weaker yesterday on 1014 points compared to 1046 points last week and 1201 points the week before.

 

  Cape Size    

   Panamax        

  Supramax 

Index 

       1679

       1052

        924

Last week

       1875

       1054

        901

Spot time charter     

 $ 12,000/day     

 $ 8,400/day 

$  9,700/day 

One week ago

 $ 13,500/day

 $ 8,400/day 

$  9,400/day

Containers: There was a very modest spike in freight rates in the eastbound Pacific last week as the Shanghai Container Freight Index reported an 11% increase in the spot rate per FEU from Shanghai to the West Coast. Meanwhile carriers are to again attempt to lift rates from Asia to Europe with a GRI of $1,000 on September 1 which represents an increase of about 150% over current disasterous levels.

Tankers: VLCCs have lost some of their bounce, at least temporarily with too many new builds coming on stream and not enough demand to keep everyone busy over the main northern vacation season . Drewry is forecasting annual growth in the crude tanker fleet to accelerate from 0.7% in 2014 to around 5% over the next two years, to reach 377m dwt by the end of 2017. 

Thursday, 13 August 2015 15:53

Market Report - August 14, 2015

Capesize rates slumped again this week, causing the Baltic Dry Index to close yesterday on 1046 points compared to 1201 points last week and 1100 points the week before.

 

  Cape Size    

   Panamax        

  Supramax 

Index 

       1875

       1054

        901

Last week

       2514

       1013

        904

Spot time charter     

 $ 13,500/day     

 $ 8,400/day 

$  9,400/day 

One week ago

 $ 19,700/day

 $ 8,100/day 

$  9,300/day

Tankers: VLCC spot rates from the Middle East to Asia have fallen below $50,000/day, their owest level in almost eight and a half months and are sitting at only about half of what they were in mid-July.

Friday, 07 August 2015 08:26

Market Report - August 7, 2015

Rates for Capesizes have reached their highest levels since late 2014 on the back of continued support from Brazilian and Australian mining exports, itself in response to the recent rally in iron ore prices. As a consequence, the Baltic Dry Index shrugged off weak demand in other sectors to close yesterday on 1201 points compared to 1100 points last week and 1102 points the week before.

 

  Cape Size    

   Panamax        

  Supramax 

Index 

       2514

       1013

        904

Last week

       2116

       1044

        892

Spot time charter     

 $ 19,700/day     

 $ 8,100/day 

$  9,400/day 

One week ago

 $ 16,000/day

 $ 8,300/day 

$  9,300/day

Tankers: Teekay Tankers has acquired the 12 ship fleet of Suezmax tankers owned by Apollo Global backed Principal Maritime for $662 million. The Teekay owned tanker fleet will thus increase to 44 vessels including the 10 Suezmax tankers already owned. The new acquisitions are due to be delivered by the end of October and are expected to operate in the currently healthy spot market.

Friday, 31 July 2015 10:48

Market Report - July 31, 2015

372 Market

The long awaited pick-up in the iron ore market is continuing to fuel demand for Capesizes but there’s still a way to go before anybody is making “real money” beyond covering operating and finance costs in the bulk market. The wild card is how long Chinese re-stocking will continues for with Port Hedland, Australia (picture above), the world’s largest iron-ore export port alone shipping 38.4 million tons in June

With Capsizes slightly stronger and Panamaxes a little weaker, last week’s gains were maintained allowing the Baltic Dry Index to close yesterday on 1100 points compared to 1102 points last week and 1009 points the week before.

 

  Cape Size    

   Panamax        

   Supramax 

Index 

       2116

       1044

     892

Last week

       1924

       1161

     896

Spot time charter     

 $ 16,000/day     

 $ 8,300/day 

$  9,300/day 

One week ago

 $ 15,000/day

 $ 9,300/day 

$  9,400/day

Tankers: VLCC one year T/C rates have strengthened to around $55,000 per day thanks to continued healthy demand and perhaps helped by the nonsense going on in Nigeria. Interestingly, the current rates are double the average market rate for the past five years with prices for secondhand tankers also heading north with a five-year-old VLCC up 5% from $80m since June, a 10-year up 7% from $55m, and a 15-year old up 11% from $37m. On the other hand newbuild VLCC prices are struggling at a fairly static $95-96 million depending on specifications.

Thursday, 23 July 2015 12:46

Market Report - July 24, 2015

Demand for Capsizes continued this week to lift the Baltic Dry Index by another 100 points and to close yesterday on 1102 points compared to 1009 points last week and 853 points the week before.

 

  Cape Size    

   Panamax        

   Supramax 

Index 

       1924

       1161

     896

Last week

       1611

       1149

     723

Spot time charter     

 $ 15,000/day     

 $ 9,300/day 

$  9,400/day 

One week ago

 $ 12,000/day

 $ 9,200/day 

$  8,600/day

Containers: Attempts to raise rates on the Transpacific trade through General Rate Increases this month have failed miserably. Last week, Drewry’s Hong Kong-Los Angeles index dropped to its lowest level since 2009, at $1,218 per FEU.  At the same time, Transpacific rates to the US east coast are at their lowest levels since December 2011, having fallen by around 52% in just five months. 

Thursday, 16 July 2015 21:22

Market Report - July 17, 2015

A bit of waiting time is never a bad thing to help lift shipping rates.  Hence the current 40 coal loaders anchored off Newcastle, New South Wales is being seen by some as a welcome development, more especially since many are Capesizes. During 2014, a record 159m tons of coal. mostly thermal, but also some metallurgical, was exported through the port with a value of A$13.78bn (U.S.$10.3bn), most going to Japan (42%), China (22%), South Korea (17%) and Taiwan (10%). Newcastle thermal coal was valued at $60.30 per tonne on July 10, compared with about $74 a year ago but following an extended period of flat demand and depressed prices, buyers are now back in the market.

Perhaps with the above in mind, there was a spurt in Capesize interest this week with the Baltic Dry Index closing yesterday on 1009 points compared to 853 points last week and 794 points the week before.

 

  Cape Size    

   Panamax        

   Supramax 

Index 

       1611

       1149

     823

Last week

       1279

       1016

     759

Spot time charter     

 $ 12,700/day     

 $ 9,200/day 

$  8,600/day 

One week ago

 $  9,300/day

 $ 8,100/day 

$  7,900/day

Containers: Maersk Line announced this week that it will raise the freight rate from Far East Asia to Europe by $1,000 per TEU effective August 1. The Shanghai Containerized Freight Index was quoted a rate of only $699 per TEU last week so it remains to be seen whether such a significant increase can be made to stick. 

Friday, 10 July 2015 09:06

Market Report - July 10, 2015

We have spoke to the issue before but there is no let-up in  2015 dry bulk demolition activity. The monthly average for the first six months is 3.3m DWT whereas in 2014 the first half year averaged only 1.3m DWT per month.  Spurred on by a horrendous market for owners, April 2015 alone saw 5.4 million DWT being scrapped which was the highest on record for a single month. BIMCO statistics show that since  the beginning of the year 68 Capesizes and 104 Handysizes have been sent to razor blades as part of  262 ships for the year to date.

A modest market rebound this week on the back of more interest in Panamaxes with the Baltic Dry Index closing yesterday on 853 points compared to 794 points last week and 829 points the week before.

 

  Cape Size    

   Panamax        

   Supramax 

Index 

       1279

       1016

     759

Last week

       1226

        883

     712

Spot time charter     

 $  9,300/day     

 $ 8,100/day 

$  7,900/day 

One week ago

 $  9,500/day

 $ 7,000/day 

$  7,400/day

Containers: Spot rate recoveryon the major east-west routes is taking hold as a general rate increase combined with capacity reductions are having the desired effect. All are now holding their breath for a strong peak season to at the very least maintain recent increases. Unfortunately the news on the west bound Los Angeles to Shanghai route is less encouraging where rates have hit rock bottom for the year at around only $600 per FEU. Despite the U.S. push to increase exports to Asia, the numbers tell a different story with volumes down by more than 20% in the year to date. Major shippers are tied to service contracts with ocean carriers but traditionally hold back 20-30% of their business to play the spot market.

In an unusually scathing report issued this week, Drewry Maritime Research has described the problems of the container industry as a “toxic" mixture of overcapacity, weak demand and aggressive pricing which is threatening ocean carriers’ profitability for the rest of 2015 – the industry will be lucky to break even this year.” Drewry goes on to estimate that “as many as 129 ships of 8,000 twenty-foot-equivalent units and above will be looking for work across a number of trades in the second half of 2015”.

Clearly there are dissenting views as just this week Maersk Line confirmed its latest new building order for nine 14,000 teu containerships from Hyundai Heavy Industries, the latest segment of a $15bn spending reinvestment in capacity. This latest deal has an option for up to eight additional vessels and is valued at $1.1bn.

Tankers: Platts is reporting that The Panama Canal Authority is seeking a Suezmax tanker on a three-month time charter starting next January for training purposes in the Atlantic Panama Canal waters. The three-month time charter should include an option to extend for an additional three months and the maximum age of the vessel should be 10 years, LOA 366 meters, beam 49 m and preferably Panama flagged. It is intended to be used to train pilots, tug masters and line handlers.  At $40-50,000 per day depending on where they are trading, Suezmax’s are not so cheap these days but perhaps a good opportunity for some lucky owner.

Thursday, 02 July 2015 16:22

Market Report - July 3, 2015

Overall confidence levels in the shipping industry fell during the three months to May 2015 to a level equal to the lowest rating recorded in the past seven years, according to the latest Shipping Confidence Survey from international accountant and shipping adviser, Moore Stephens. The depressed state of the dry bulk sector and the effect of the entry into the market of private equity were the subjects which dominated responses to the survey, neatly encapsulated by the respondent who noted: “The remarkable acceleration of scrapping of larger bulk carriers and the conversion of many new buildings into tankers will have a positive effect on the dry bulk market sooner than had previously been anticipated – provided, of course, that suicidal private equity has learnt its lesson and accepts that this is not an opportunity to make a quick fortune.” Another respondent said: “The problem facing shipping is the entry into the market of silly money by investors who have no idea about how the industry works and for whom any money lost is a drop in the ocean.”

All that aside, the Baltic Dry Index did not manage to hold on to all of last week’s gains and closed yesterday on 794 points compared to 829 points last week and 779 points the week before.

 

  Cape Size    

   Panamax        

   Supramax 

Index 

       1226

        883

     712

Last week

       1431

        827

     723

Spot time charter     

$   9,000/day     

 $ 7,000/day 

$  7,400/day 

One week ago

$ 10,500/day

 $ 6,600/day 

$  7,600/day

 

 

Friday, 26 June 2015 08:24

Market Report - June 26, 2015

Demand for Capesizes has perked up again resulting in the Baltic Dry Index closing yesterday on 829 points a step in the right direction from 779 points last week.

 

  Cape Size    

   Panamax        

   Supramax 

Index 

       1432

        827

     723

Last week

       1241

        851

     721

Spot time charter     

$ 10,500/day     

 $ 6,600/day 

$  7,600/day 

One week ago

$   8,700/day

 $ 6,800/day 

$  7,500/day

Containers: Compounding the $500 per FEU suicidal spot rate levels from Asia to Europe, rates on the key Hong Kong to Los Angeles trade have fallen to a four year low and now stand at a lowly $1300-1400 per FEU. Even during the current low season, these rates are unfathomable given that the members of the Transpacific Stabilization Agreement, comprising 15 of the largest carriers in the eastbound Pacific announced in May a General Rate Increases of $600 per FEU for June 1 and again on July 1 in combination with a $400 peak-season surcharge also to take effect on the same date. Meanwhile, China’s Ministry of Transport has issued fines totaling $693,000 on 21 container carriers for misreporting freight rates in China-Japan trades.  

Tankers: Given that we are at the height of the northern summer VLCCs trading from the Arabian Gulf to Asia are still making good money in the spot market at $70,000 per day.  Aframaxes and Suezmaxes are maintaining similarly strong rates albeit with regional variations. 

Friday, 19 June 2015 14:12

Market Report - June 19, 2015

 

 

  Cape Size    

   Panamax        

   Supramax 

Index 

       1241

        851

     721

Last week

         820

        719

     678

Spot time charter     

$   8,671/day     

 $ 6,782/day 

$  7,538/day 

One week ago

$   5,467/day

 $ 5,735/day 

$  7,085/day

 

 

Friday, 12 June 2015 12:24

Market Report - June 12, 2015

 

 

  Cape Size    

   Panamax        

   Supramax 

Index 

       820

        719

     678

Last week

       818

        570

     654

Spot time charter     

$   5,467/day     

 $ 5,735/day 

$  7,085/day 

One week ago

$   5,600/day

 $ 4,500/day 

$  6,800/day

 

 

Page 7 of 11