Market is bleeding, give your blood

Today’s international blood day donation and unfortunatly the blood found at sea from shipping industry players is not the right quality for medical use.

Focusing on Handies

In today’s BDI, we can read, fixed ex ECSA “Siva Emerald’ 2010 28300 dwt dely Rio De Janeiro 17/21 Jun trip redel Continent intention pig iron $4 ,750 daily – J Lauritzen” Ship was open Sao Sebastiao, so only half a day ballast to call Rio De Janeiro. Converting this  US$ 4,750 daily with a grain stem bss 26500 mt loaded 6000x/4000x to Algeria, it brings, according to our calcs an equivalent to something around 14.50/14.70usdpmt including a ballast back to Gib in the estimate. For your benchmark, today’s BHSI HS3 (ECSA to Skaw pass) is at 5586 gaining 8 points vs yesterday. For the exercice, at USD 5,586 daily, you can add 1usd on your freight per metric ton equivalent. So either the pig iron has something specific which I’m not aware about or the ECSA handy market is indeed painfuly dead. As a comparison, according to BMTI, ESCA coastal trade on 30/34kdwat are hovering around US$ 5’500.

From the CONTINENT, grains requirements are finding suitable spot/ prompt tonnage with tce at below 4’000 usd daily aps (basis our calcs again) for the usual French Continent to algeria stem on handies. Charterers being in position to pick up the ship they want and surely having so many options in front of them, they are leaving the unfortunate candidates being not fixed, frustrated to try to run after other cargo. According to BMTI,  Continent to ECSA on a 35kdwt is worth US$4’000 daily, same but to USG @ US$3’500.

From EMED/BLSEA, a 21000 +/- bulk salt cargo from Alexandria to 1sp Lakes seaway (understood Trenton, close to Detroit)  on which chrtrs aiming 25usdpmt, which bss 6000/4000x bends is giving an equivalent on tc at about US$ 4’000 daily.

USG, which on the paper remains the best area to be open with, but momentum seems to be away, with HS4 losing again 21points today, and heading at 7204usd daily (it was above 7500 one week ago) and charterers open with grains outthere are finding takers to a tce below this index level.

Appart from that, as you will have understood now, your tomorrow freight rate will very likely depend on the industry capacity to get rid of ships quicker than new deliveries coming in, here you’ll find an interesting report done by Fairplay IHS with below some datas extracted from their full report (in case you don’t have full access to the link)

“Year to date, 20.6 million dwt has left the market, which translates to a 47 million dwt or 6.0% reduction in tonnage supply on an annualised level through demolition sales” […] “only about 40% of the dry bulk carrier newbuildings that have been due for delivery so far this year have actually entered service, net fleet growth in the first five months of the current year has only come to 3.0 million dwt or about 0.4%” and the analysts are bit more optimistic than Bimco mentionned yesterday as they recon / say “All in all we continue to believe the dry bulk market will see a gradual recovery, but it is not until 2018 we expect average spot rates back at cash break-even levels,”… they might see then the market recovery 1 year before BIMCO analysis passed yesterday.

We have not stopped bleeding, yet, then – but bleeding at work shall not prevent all of us to go for 450ml blood donation. Be brave, it does not hurt as much as we believe.

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