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.

Thursday, 29 October 2015 17:54

Market Report - October 30, 2015

The Baltic Dry Index closed well down yesterday on 728 points compared to 786 points last week and 766 points the week before.

 

  Cape Size    

   Panamax        

  Supramax 

Index 

       1254

       682

        633

Last week

       1512

       685

        649

Spot time charter     

 $   9,200/day     

 $ 5,500/day 

$  6,600/day 

One week ago

 $  10,900/day

 $ 5,500/day 

$  6,800/day

Containers: With nothing but bad financial news dominating the headlines this week, it was good to see that optimism for a recovery does exist with China Shipping Container entering agreement for up to 11 ultra large containerships (ULCS) of 21,000 TEU capacity under a bare-boat charter via a wholly-owned subsidiary. Also this week, and despite any official announcement, Maersk Line has added to the company’s order placed in July this year for 9 x 14,000 TEU vessels with confirmation of an option for a further 8 vessels of the same size. Again, according to our friends at Alphaliner, 190 container ship new building contracts with a combined capacity of 2 million TEU have already been concluded this year thereby exceededing the full year orders for each of the last seven years. There is some speculation, probably justified, that the introduction in January 2016 of new IMO Tier III regulations is driving the current order book since vessels with keels laid before January 1, 2016 are exempt. Tier III rules stipulate lower NOx emissions in Emissions Control Areas.

All this is taking place against a background of accelerating layups with around 1 million TEU of capacity expected to be inactive as we head into the northern winter months. Alphaliner’s latest data is indicating more than 26 idle containerships, totalling more than 900,000 TEU of capacity which is about 4.7% of the total global fleet. One of the idle vessels is reported to be a Maersk Line Triple- E of 18,000 TEU capacity due to blanked sailings from Asia to Europe. The company issued a profit warning last week on account of an unexpected $600m shortfall in the company’s full year profit forecast. 

Friday, 23 October 2015 08:52

Market Report - October 23, 2015

We wish we could bring good news one of these weeks but perhaps we should just give up on the market and do what UK Prime Minister David Cameron did yesterday with Chinese President Xi Jinping – head to the local pub. The Baltic Dry Index closed yesterday marginally up on 786 points compared to 766 points last week and 817 points the week before.

 

  Cape Size    

   Panamax        

  Supramax 

Index 

       1512

       685

        649

Last week

       1368

       742

        661

Spot time charter     

 $ 10,900/day     

 $ 5,500/day 

$  6,800/day 

One week ago

 $   9,500/day

 $ 5,900/day 

$  6,900/day

Containers: In its 2015 Review of Maritime Transport, the United Nations Conference on Trade and Development (UNCTAD) has taken a swing at the shipping industry for being “uncompetitive”. The conclusion of UNCTAD is that the world is being  serviced by too few suppliers thereby impacting competitiveness. Specific reference is made to the fact that the three largest liner shipping companies, Maersk, MSC and CMA CGM control almost 35% of the world total container carrying capacity, the top 10 companies control around 61% and the top 20 companies around 83% of capacity.

Tankers: With charterers holding back cargo stems, daily spot rate earnings for VLCCs from the Arabian Gulf to Asia have fallen by more than $18,000 over the past week and are now sitting at around $85,000/day, a level that the dry bulk sector would still give their right arms for.

Thursday, 15 October 2015 22:15

Market Report - October 16, 2015

Everyone is hoping for a better 4th quarter but so far at least, the market remains lifeless. The Baltic Dry Index closed yesterday on a pretty miserable 766 points compared to 817 points last week and 888 points the week before.

 

  Cape Size    

   Panamax        

  Supramax 

Index 

       1368

       742

        661

Last week

       1598

       736

        672

Spot time charter     

 $   9,500/day     

 $ 5,900/day 

$  6,900/day 

One week ago

 $ 11,200/day

 $ 5,900/day 

$  7,000/day

Containers: Despite some slowing of new construction, it appears that the global container ship fleet will achieve record growth in 2015 with around 200 more ships of approximately 1.6 million TEU of capacity being added. Against this background, there has been an increased in idled tonnage of just over 100,000 TEU to around 780, 000 TEUs in the past two weeks and the pace of lay ups is accelerating with around 250 vessels now unemployed – the highest since the 2008/09 recession.

Tankers: Adding further support to six figure VLCC daily spot rates is increased waiting times off Chinese ports which are running out of storage for purchases made to take full advantage of the current weak price of oil. Discharge delays of two weeks or more are becoming common on account of China’s oil purchases being up by about 10% this year over 2014 levels.

Friday, 09 October 2015 00:05

Market Report - October 9, 2015

The bottom fell out of the Capesize market again this week leaving the Baltic Dry Index to close yesterday on 817 points compared to 888 points last week and 992 points the week before.

 

  Cape Size    

   Panamax        

  Supramax 

Index 

       1598

       736

        672

Last week

       1911

       704

        695

Spot time charter     

 $ 11,200/day     

 $ 5,900/day 

$  7,000/day 

One week ago

 $ 13,600/day

 $ 5,600/day 

$  7,300/day

Tankers: VLCC spot earnings have taken off over the past couple of weeks and have breached the $100,000 per day level on the main Middle East to Asia. The week’s Chinese ‘Golden Week’ holiday proably had an influence but even so, the lucky owners with vessels in place have had every cause to crack the champagne. The last time spot earnings topped $100,000 per day on the benchmark route was in July 2008.

Page 6 of 11