last market report before holidays.

 

Norden has published their results for H16 and according to these results, the board shall be one of many others welcoming the upward summer turn on the market. norden results, If you’re too lazy, busy, to read full article, please find below main interesting figures/facts for this Company taken out of this article:

  • “Group net loss amounted to USD19.4 million in 1H16 compared to a profit of USD81.9 million in the same period last year, while revenues decreased to USD608 million from USD879.5 million.”
  • “The dry bulk business area generated revenues of USD235.5 million, down from USD302.4 million and it swung to a loss of USD31.3 million from a profit of USD13.0 million.”
  • “In product tank, revenues decreased to USD76.3 million from USD121.2 million and the business generated a profit of USD7.3 million, sharply lower than the USD30.3 million in 1H15.”
  • “The Norden board narrowed its full year result forecast to a loss between USD60 million and USD20 million from an earlier forecast of a loss of USD60 million to USD30 million.”
  • “Shipping analysts at Pareto in Oslo said that the company continues to outperform benchmarks on earnings in both divisions –although this is not much to celebrate as the depressed markets weighs heavily on earnings.”

All is said above and it tends to prove again nowadays the tough time on which owners put themselves, on their own, like kids, while ordering ships and ships… and as we are on the order book, let’s go for more and bigger ships.

No matter if the market is oversupplied with tonnage, the spot prompt picture is in Owners’ favour in the Atlantic whichever the size. Yesterday we were mentionning this Poland to algeria 30’000 10pct bulk wheat stem with charterers who may have to face 17+ on a pmt bss. Bmti is now whispering 19/20usdpmt. Are these figures realistically achievable for Owners? it’s rather difficult to say. For sure, running some TCE equivalent here, on a ship able to load 31’000mt the 17+usdpmt is equal to USD 7’250/day dely Skaw, at 20usdpmt, same terms, it’s going up to 9’600 usd daily.

In these reports I’m often showing/reporting a bad picture for Owners, to be fair, it’s important also to point out the difficult time which are ahead of the Continental grains charterers/traders ahead of them. They were all doing their plans on a basis of a nice, lovely, good grain crop from usual big European exporting countries (namely France for example) and despite the whole intelligence which has been put in the growing grain process, Mother Nature has decided to go on another way and grain traders have to find out new suppliers, from new origins. They are facing the triple penalty. It will be interesting to see how they’ll rebalance their strategy for the next Northern African countries tenders. Sure they won’t be caught a secont time. Back on the Chartering market, on the grains, you will start to be used to it, Black Sea remains the winning area. We got information that a 25000 5pct barley stem from Taman to algeria has been covered in the mid 10’s but this remains to be confirmed.  On the USG, it’s quite different whether you’re a supramax player, then charterers would better go to their banks to get some cash out, or if you’re a handy owners, open their, then same, owners might need to go to their banks, to explain, the cash-in will arrive soon…but not right now.

ECSA, handies still, this fixture reported today in the BDI, which you’ll see in BMTI tomorrow is self explanatory “‘Lazeez’ 2000 32367 dwt dely Recalada prompt trip redel Libya $6,000 daily – Cargill” 6kusd to go to Libya?! according to our records, the ship was said spot in the region since the 4th of August. I don’t know if anything was wrong on this ship (trust nothing unless Cargill is ok to give up Rightship vetting to go to Libya) but at such level to end up in Libya, this is not a great deal!!

A quick word on the Supras, I would be tempted, at 666 today, they’re doing damned well overall. The USG to Skaw passero is gaining 550pts today heading at 8744 to be compared with the fixture reported done last week on a 58kdwt dely Corpus Christi redel Turkey at $8250 daily.

Finally, I generally speaking, avoid to talk about personal things in this report, but thanks in advance for your good wishes for my holidays starting this evening and I’ll be back on the deck 1st september. In between enjoy your time off these reports.

 

Back on track… have a drink

“Back on track” can be the summary of what we are seeing today on the chartering market. Owners and their brokers are back in front of their desk and for a change we have now charterers calling to get some sort of ideas on what’s going on. Almost all fresh cargoes proposed on the market are already showing beg september cancelling. Charterers who have to get out on the market and be covered in the next 10 days will most probably suffer a bit from lack of tonnage available around, unless the loading area is in Blsea. On handies, grains from Continent, situation remains unchanged eventhough we can notice ships being fixed quicker than the cargoes disappear. Not really strange knowing we do not see all the scraps or fertz requirements. “Low profile” is also the charterers strategy right now. Trying to remain off market as much as possible to avoid giving to owners the feeling that market being unbalanced, in the latters’ favor. Glencore 30’000 10 pct bulk wheat from Poland to algeria is likely to have to face at least 17.50usdpmt. Probably even bit more if they’re stuck. All in all, charterers who have to cover handies within the next 10 days as off now shall better be bit cautious and probably take what they are proposed especially if restrictions applies in one of the ports. When no restrictions applies at ports, charterers have to consider larger ladies than really needed in order to find a taker on their tct.

Is Black Sea losing slowly his momentum is an open question, Cargill reporting rating 6kusd for a 32/34kdwat to Morocco with grains, is somehow remaining a fairly decent number for Owners. This to be compared with the Kingfisher D, reported gone at 3’250usd dely canakkale redel UK-Continent. Ship was ballasting from Alexandria. For sure, the needs of ships to move grains is still here and ships keen to move cargoes from Blsea are also around. The party can keeps going on.

ECSA, the party is bit less exciting on the handies. Bunge is reported fixed with a 8yrs old 32kdwat namely Sea Majesty at 6’000usd daily for a trip to Tunisia, with delivery Recalada. HS3 is today at 5961usd daily.

USG, on Ultramax, we were reading that “rates are popping like pop corn“, With Ultramax confirmed fixed at $16’000/day for grain run to FEAST, see in today’s bdi report Mv ‘Aquapropser’ gone sw pass to China at $16’000′. I let you run the estimate on this one and compare with this fixture reported corrected last week asf: Eternal Grace’ 2006 60000 /10 hss US Gulf/China 24 /30 Aug $26.50 fio 10000 shex/8000 shex – Raffles

Finally, to end up with this today’s report, while reading the below comments we can wonder if our industries top leaders are able to think forward.

“For instance we have seen the expansion of the Panama Canal and did not need to build Panamax containerships like crazy beforehand. Today more than 70 of these ships are spot with no prospect of employment”.

On one side, we can appreciate ordering ship and taking delivery is a kind of a long process and it needs bit more time than just snapping fingers, on the other side, the expansion of the Panama canal has also been one of the biggest and longest construction process in the last decade (the project for the new Locks started back in 2006 and was supposed to be up and running in August 2014. Longer process than ordering and taking delivery of ships. If someone can explain me then! Did not they know their Panamax ladies, ordered in 2012 will somehow become useless? In the meantime, Panama Canal expects tonnage to grow by 17% from 2015 (record high).

On the grain world, an interesting article found on Bloomberg, big players (Cargill and Dreyfus) in the Soyabeans market in Brazil are stopping production there due to Margin disappearing. you should find easily the link…dreyfus and Cargill sharing the same vision

and as a normal shipping people you’ll be interested to read information about beer and barley. Find it here. beer is not only water and expenses it’s also savoir-faire

Salud

 

 

Quiet day on chartering. Surely due to North Korea being under national holidays

kind off no bones to bite on the chartering side today so let’s go for a ride on the web to try find out some interesting information

on owners’ side:

Precious: scrapping 3 other handies bringing the number of ships to the demolition at 10 so far for 2016 for these owners. The last ship sold for scrap is Parinda Naree 23700dwt blt 1995. on a larger scale you can have a look at this article here, about Newbuilding orders and dry bulker scrapping both in sharp slowdown scrap Vs new deliveries with few quote from the article here “For the overall dry bulk market, the picture is largely similar to the Capesize sector as about 20.7 million dwt of capacity left the market due to scrapping in 1H16 compared with 22.1 million in 1H15. The 2H15 saw 9.7 million dwt, and so far in 3Q16 we have only seen about 1.1 million dwt”

on the traders world:

Noble and Olam… to rescue each others? Noble and Olam
Europe might need an English hand on the wheat. Out of a sudden European politics might want a Brexit process to be rather slow than ASAP as hopped end June by few great présidents known for their long terms view. an English hand for European cereals

Russian’s wheat production in one chart https://twitter.com/GroIntel/status/763991820061728768?lang=fr

African wheat consumption and production in one chart african wheat production/consumption

 on the commodities

easy to predict right

have a nice day

no clue part 2

What’s a good report?

A document which is found informative but without to much boring information, otherwise the report is remaining unread. So need to add something in so it becomes kind off entertaining.

So let’s start with the information:

Market is generally speaking moving upward still and again. Capes are said to be “with a strong $600” in the pacific Round voyage , Trans-atlantic round voyages are “with a modest $100/200 gain”. Panamax are prepared “for the rally” with +$300 and +$500 for respectively UKC transatlantic RV’s and Continental Front hauls. Resistance to this booming market is coming from handies which, anyway, have managed until now to somehow go through the last couple of week downturns. Meantime if you look a bit more into details on the Handies, the picture does not look that bad for owners $7’000 passing skaw to wmed via baltic with grains is somehow a decent number. Not the $10’000 for scrap to emed as mentionned yesterday, but we ‘re not talking about the same commodity.  Also the few handies available are disappearing fairly quickly, to Brazil with fertilizers in the $6’000/7’000 region, to Wmed even higher is rumored done today.  Continent still the right position on the ship is making the difference.  The ships with ferts heading to Brazil hoping to be able to get better level than current ones, which are reported done Brazil to Baltic at $6500. From BLSEA Glencore barley cargo from Novo to Algeria with 25000 5pct 8000c/2500x out is said to be discussed below 14usdpmt this morning on a ship able to load 24’000mt. If true seems, according to info I could gathered charterers decided to go for the cheap vsl eventhough she was not maximizing the intake. Ex Kavkaz, we heard a 30’000mt grain stem to Morocco was booked in the region of 10usdpmt bss 8000sshex/5000sshex for loading within 10 days as from now.  On supra, ex Emed Olam are reported fixed dely EMED w/ Mv ‘DAXIA’ at 10’250usd for redel Wafr, the requirement was seen asf on the market A/C OLAM 42/58000 dwt grd/grab “Dely Thessaloniki, l/c 14/18 aug tct with clinker redely wafrica intn Cameroon” Ship coming from Nermut Bay (abt 1 day ballast to Thessaloniki) basis our record and being fixed while spot.

Finally without willing to be the prophet of doom and gloom the surge seen at the end of this week could also be explained with the long week-end ahead of the Catholic countries and charterers, traders willing to have things done before heading to the beach.

Shall we talk precisely about bunkers prices, I still think we are already well covered by Merril Lynch analysis given to you yesterday, meantime fact is, bunkers are going up, brent being around 46usd.

To try to provide a good report, information still, “Cat on a burning roof” everybody can figure out the meaning but my English teacher, called me to correct and teach me the right way in English to name it it’s “a cat on a hot tin roof”, Maggie, if you’re reading me.

informative?: I think I can tick the box

And let’s conclude with the entertaining part of this report, I strongly invite you to open this youtube link sailing race rules where a clueless but quite funny commentator is not even trying to understand the Olympic sport he is supposed to comment on tv. Good to know, bankers and bunkers specialists -are not the only industries to have clueless people.

entertaining?: I think I can tick the box

I can wish you a good long week-end and in case you’re wondering through which broker you should fix on Monday 15th aug, then contact me on tweeter @jeromesorrel and you’ll find the team, on the deck ready to get it done.

 

 

 

 

I have found that friend

It seems market do not really know where to go. Up? Down? remain where it is now? If I were to describe chartering market with some simple words, words I can easily  understand, (I’ m a simple guy, maybe even simplist) , let me ask you

-have you ever seen a cat on a burning roof?

no matter the answer, you can picture it yourself , well current market is kind of similar, he does not know on which leg he shall stand to avoid the burning pain.

Yesterday market mood was fairly negative and today pretty much enthusatic and so index are. Yesterday’s index quoted in bdi are all back up to North thanks to apparently new fresh enquiries which are out. On the Supras handies size, the upward is more limited and reaching the north pole, at this rythm will take a bit of a while. But never mind, let’s believe market is taking the right direction. Focusing on the fixtures reported attached, on the Supramaxes with origin around us, the Cs Soraya reported fixed dely livorno at 10’600usd to end up to Spore-Japan range, is in a way confirm my yesterday comment. Assuming it is going through Black Sea, this means for charterers 3.5 days on their account before reaching Canakkale, this is about 10% of the total duration (on quick terms and all going well). Knowing the S1B route was yesterday at 11’321 Ex USG comparable ship, for the same destination is getting 11’650usd daily which is out performing all BSI routes. On the handies/handymax still from the reported Bdi fixtures, Owners of Nordic Riga 35kdwt can be awarded owners of the week, being able to grasp 10’000usd for a scrap cargo dely Liverpool redel Emed is quite a nice move. This is leading owners to claim “handy continent market is on fire”. I’m not quite sure, I would rather say the Continent market has become lately a position market. When owners open there with the right ship with the right dates on which you add a bit of savoir-faire (the other way to say luck) then you get nice number. Knowing Scrap is worth a premium (compared to grains) Other handies reported, out of 5, 4 are done  Canakkale and 5something is the magic number for intermed business. View amount of cargoes out one could think market will likely go up but counting positions

received here since Monday bss

  • open BLSEA/EMED
  • 25/40kdwat
  • spot up to 23rd august
  • max 25yrs old,

we can still find about 35 ships being in position.

Same list but with ships able to be  delivered in Canakkale within 7 days, we are down to a rugby team with 15 ships teaming up.

To conclude with this report, info on the S&P market which is obviously linked to the chartering one. Not sure knowing 371 bulk carriers units have been changing Ownership, as anyway it often remains quite unclear who and where is based the Company owning the ship. On the demolition side, if prices have reached their bottom, we can assume owners are less in demand to send their ladies in the backyard.

What else to say? Chartering market is not the only one to be like a cat on a burning roof. If you go through this, everything but not informative – in my opinion only,  article found here: crude prices? from 25 to 90$

You’ll realize that we do not have an easy job compared to bankers, who can tell looking at you right in the eyes:

“Oil trading in the extremely wide ranges of $25 to $90 per barrel is a distinct possibility over the next three or four years”

which translated into bunkers prices means

“Ship & Bunker data suggests that based on recent trends, crude in the $25-$90/bbl range could put the range for IFO380 bunkers in the primary ports as low as $100 per metric tonne (pmt), and as high as $500 pmt”

Having difficulties to predict tomorrow’s market in any commodity available shall prevent a specialist to say “prices? go from $25 to $90 and you’re safe and covered”… I can see from here my principals asking me to run a freight estimate for 30’000 10pct blk wheat rouen to Algeria for November shipment, if I tell him “put in your books a range from 10 to 40usdpmt and you’re safe, but please take these estimates as brokers only without guarantee”

in case you forgot, we are at your disposal for sharp or fanciful numbers.

marketing in chartering and shipping

Once again not much to say, at first sight, about the chartering spot/prompt market. The summary is here, about yesterday’s index

Not that there is nothing to do, nor that we don’t try/discuss various cargoes/ships but as mentionned by BMTI “brokers, were busier twiddling their thumbs than trading“.

As always I’m happy to share bit of information.

For instance, Glencore, seems to have fixed this requirement – 35.000/10 CANOLA ABT 53′ VARNA/ARAG PPT/10 AUG 6.000 /8.000 – which was on the market since end july, done finally yesterday at something touch below 12usdpmt. According to our TC estimate this is giving about 6’500usd daily delivery Canakkale on a nice modern 38kdwt. I don’t have the info whether Glencore struggled to find the perfect candidate earlier at their freight ideas or if charterers bet on a softening market ex black sea. Glencore, still, is open with this (about to become) trendytrade  Ctza/Rouen-Dunkirk 35.000/10% Wheat Laycan week 32/beg week 33 8000x/5000x freight on this one? Trust if they get below 13usdpmt, they manage quite well.

You’ll note how the cargo is circulated, “end week 32/beg week 33” this is a pudic way to say “prompt, can also do spot”… or “need a spot ship, if really needed chrtrs can consider to wait a bit”.

This leads to my next point about Marketing in shipping and chartering. (which if you’re really after chartering spot market info, you can skip reading the below, if you still read it… no rights to complain)

So, about Marketing and Chartering, this is very sophisticated and it’s a kind of a task to resist the siren-like appeal. There are a baunch of great tricks used by the brokers in their emails which are eyes-catching.

We got brokers who call themselves A1, which is a kind of a statement. The subliminal message behind is

“fix via me and you’ll be safe and out of troubles, 100%Guaranteed”.

And what if things go wrong? Then this is the joy of the shipping adventure. Sorry.

You also have brokers advertising the counter party they circulate being “First Class“. It’s a fact then, fix this First Class principal with A1 broker and you’re the king on the market.

The brokers’ marketing tricks are endless. We got a nice one also this morning, circulated as follow

“S P E C I A L  P O S”.

You have to recon, this is quite a start. I started with the great feeling of being  blessed to be part of the circular for this (very) Special Position. My side, this morning, I was already almost drawing the fixture recap while reading this one. Then reality caught me bit quicker than expected. This S P E C I A L  P O S is only about a handy open in Oran (Algeria) next week. Not a ship open in Antibes, or Geneva port, no pretty commonly in oran. Then out of a sudden I started wondering what’s so special about this position? Then I realized this handy open in Oran is 26yrs old. Then I went on something else and focused on this “exclusive” cargo being quoted with the same commissionstructure from at least five brokers. I decided to give a try to the one stating “exclusive, from close friend“. As shipping/chartering is probably one of the last remaining industries where you can still make business with friends. But it appears that I picked up the wrong chanel and I shall have chosen the one quoting “LOCAL Friend“. LOCAL is also a nice little word which apparently makes the difference. Of course, when you read this, you know this is going to make the difference. A broker fixing his local charterers through a broker fixing his local headowners for a business which is starting from the opposite side of the globe, to end up in the middle of nowhere is surely a plus. But then I had to cope with time difference. And I’m still here, free of the duty to draw the recap.

Nobody so far dared to put in their circular “Exclusive from close direct friends” and it’s probably the next Big thing for 2020. If this can make a difference, let me use the Promotion trick done in the FMG Industry, I can propose you The package ficture deal. Fix 10 times with Pelagos within the next 10 days, and get 10% discount on our commission on the 11th fixture, and don’t bother about exclusivity from our direct close local friends, we’ll handle it. Don’t try to resist to this siren-like appeal, it’s a great deal, offer valid for 10 days only. You should rush.

Have a lovely afternoon

8th aug. International cat day. Is it good news for shipping? It has to be

8th august.

“Difficult times these for all tonnage types with the ‘more cargo needed if further losses are not to be seen’ comment on most market reports. What for the future? Well certainly Owners/ Operators continue to be optimistic for 4th quarter and beyond with some suggesting that once the Olympics are over there will be an immediate and sharp reversal in fortunes. What one has to consider is that if this does not happen will this hit the market even harder than anyone expects?”

this above is a quotation from famous former Ldens report edited on 7th august 2008. What has changed since then?

Remember exactly 8 years ago it was the kick off for the Beijing 2008 Olympic Games. The beginning of the falling from the cliff process on the BDI. Few, at that time, were starting to say, “now, China has done the whole window dressing works to show to the World how great is the country, China will start stopping importing as much commodity as done in the past years and it’s pretty likely the Seaborne Market will be hit and the freight market will decline in the months to come”. Then Lehmann-Brothers arrived with the subprime and it was the knockout for shipping and what happened since then is known by everybody.

Some figures read in couple of reports are showing – if still needed -the poor situation which has to be faced by owners. On the Capes, Pacific Voyages hover at around US$4/mt with apparently a “modest upside”. Back on 8th aug 2008, this fixture was reported ‘Cape Island’ 2004 160000/10 Port Hedland/Qingdao 1/10 Sept $27.00 fio sc/30000sc –

On the Panamax, US$ 5,000 daily is the consensus value for round voyages between continent and USG. 8 years ago, it was asf “‘Nordmosel’ 2001 75257 dwt dely USGulf 18/20 August trip redel Mediterranean $65000 daily + $1 million bb – STX Pan Ocean”

On the handies, according to BMTI, BLSEA is also losing his momentum, knowing only the commission which is going to be charged by the brokers involved a 34kdwat seems to have been fixed at/or close to US$ 4’000 daily. No need to go back to 2008 to see fixtures for similar vsl/trip being done at daily hire twice higher.  Ex WMED to USG, similar size Vessel was offered at US$ 6’500 until owners realized to be competitive they had to sharpen their ideas by US$1’500 daily…

For sure today’s general sentiment is fairly negative when it comes to give a picture of the current chartering market and concerns about getting back close to levels seen on the 1st quarter of 2016 are mentionned.

We remain to be positive so please don’t forget today’s 8 august, is also the international cat day. What’s the link with shipping you’ll ask me? The answer is here, http://maritime-executive.com/features/a-day-for-five-hundred-million-cats. And you’ll be pleased to learn the long lasting relationship between cats&ships (very different from the brits’ famous fish&chips).

And our industry is and will be like unsinkable Sam where you can read his history here https://en.wikipedia.org/wiki/Unsinkable_Sam

all in all, to conclude today’s report, back again with a quotation of Robert’s report @ Ldens  done on 7th aug 2008 “Interesting comments and certainly some that we concur with though of course over the last years it’s clearly become more difficult to predict our market than ever before but there again we haven’t had a global ‘credit crunch’ and ‘financial problems or inflationary problems for quite some time with the final results yet to be seen.

Have a nice day and don’t forget pelagos is available to bridge the gap between owners ideas and charterers’ ones to end up to a balance fixture, done bit better than current market level, always in our principals’ favours, obviously.