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.

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.

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