A slow start to begin with August. And it’s honestly bit early to have a kind of feeling on the chartering market, where this week will drive us.
Surely last friday few spot prompt requirements on handy with grains ex Baltic where seen and the morning was clearly in owners favor with about 2 workable ships. Then in the afternoon, 2 spot ships failed on subs and where then discounting their ideas to try to be cover for the week-end.
Reported in today’s BMTI (friday BDI), we can see mv ‘IVS triview” 32.282dwt ship blt 2009 done aps ecsa on ppt bss with redel Continent at 6.250usd/daily this to be compared with HS3 Rdj / Recalada route to skw Passero heading 6497 (back in positive trend).
On the European side, even if not mentionned in the Bimco calendar, Switzerland is having their National day and from this side of the Alps, we shall not expect any fresh requirement on the trading market. Let the swiss enjoy their bonfire on which owners of the handy size may wish to join. BHSI is hitting today above the 400pts (Last time BHSI was at this level, we need to go back 27th September 2015), I feel it’s still bit too early to open up the champagne and declare hard time in the shipping being behind us, but to the contrary to Capers which said by BMTI “summer has been historically a period of sluggish activity”. On the handies, checking the BHSI curve, summer is traditionally not the worth period. Would this mean our shipping market is on one hand cyclical on the other hand seasonal. Seasonality on the handy, if any, is therefore driven by the Black Sea market. you can read here. Last week, Russia exported above 600,000 MT of wheat grains from blsea, which if you’re to lazy to run the math means abt 24 handies or 12 supras. And the Blsea origin is not about to be be dryed yet as the grains harvest is only completed up to 61% with 13Millions of this being wheat, 6millions being barley. Russia have harvested 33Million tonnes (abt 27million being wheat) (source istfix). As a comparison, source Franceagrimer, soft wheat 41% is harvested / winter barley 100% is harvested / Durum wheat 92% as off 25th july
On the Owners side, even handy players, are taking the necessary steps to get shorter on tonnage, as an example Precious is reported having sold 2 vsl’s, Pacific Basin has reported some results, you can believe the Press release dtd 29th july 2016 is a fairly good summary if you keep in mind, as it is a press release
- It’s surely drafted with positive comments highlights to keep faith from their investors and business partners
- It’s public, so I’m not disclosing anything which I shall not http://www.pacificbasin.com/upload/en/ir/news/press/e2343PressRelease_2016InterimResults_20160729.pdf
This chart is summarizing perfectly the financial situation:
Six months ended 30 june
US$ Million 2016 2015
Revenue 488.4 634.6
operating cash flow 7.7 58.8
(loss) / profit (49.8) 5.8
basic Earnings/share (hk cents) (14.4) 1.7
and going further in this press release:
- they managed to get the Owned handysize operating costs to US$ 4,064/day… knowing they owned 70 handies,
- abt 60% of the 2nd half 2016 is already covered at US$7,670
- their average handysize earnings is at US$6.080 / supras at US$ 5’910
These figures giving you some good benchmark, if you’re an owners, where do you perform with your fleet compared to one of the World’s leading owners and operators of modern handysize and handymax dry bulk Vessels. If you’re charterers you can figure out how tough it is to make this business sustainable.