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.  

Thursday, 08 January 2015 22:58

Market Report - January 9, 2015

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.

       
    Cape Size        Panamax            Supramax 
Index         335         776      820
Last week        517         929      925
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.

Thursday, 18 December 2014 15:52

Market Report - December 19, 2014

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. 

       
    Cape Size        Panamax            Supramax 
Index         517         929      925
Last week        879       1026      953
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.

Thursday, 11 December 2014 23:59

Market Report - December 12, 2014

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. 

       
    Cape Size        Panamax            Supramax 
Index         879       1026      953
Last week      1452       1097      980
Spot time charter      $   6,800/day       $ 8,200/day  $ 10,000/day 
One week ago $  19,700/day  $ 8,800/day  $ 10,300/day

 

Thursday, 04 December 2014 17:03

Market Report - December 5, 2014

The Baltic Dry Index closed on Thursday on 1019 points compared to 1187 points last week and 1332 points the week previously. 

       
    Cape Size        Panamax            Supramax 
Index       1452       1097      980
Last week      1347       1099      984
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.

Thursday, 27 November 2014 17:36

Market Report - November 28, 2014

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. 

       
    Cape Size        Panamax            Supramax 
Index       2347       1099      984
Last week      3130       1053      926
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.


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