market at a stop?

History is just a matter of scale. We can therefore say, today’s BMTI report is historical and the introducing text is perfect “For the first time of this month, Capesizes show some signs of calming…” In other words, the Capers rally lasted for about 12 days.

Good news for owners on the short term, Oil is said to be on the decline and the barrel for October deliveries is heading below 45usd. on a longer term basis, you can read here some forecast and analysis about the oil peak oil. What’s not exciting neither is the general dropping prices for the commodities. I could read that industrial metals are getting hit particularly hard, with nickel dropping as much as 4.1% and iron ore in China slumping to the lowest level since June. Being on the chartering side, we can wonder if the prices are down because of too much production, in which case, buyers will still need to ship the goods or if the prices are down because of a lack of demand, in which case, as a domino effect, it means no cargoes to fuel in ships activities.  A quick look on the containers market review. Rolls Royce is working on autonomous ships for 2035… This is what we can call thinking forward. Unless in between the 3d printing machines have replaced fully the usefullness of the good transportation, expected savings for lucky owners are expected to be around 22%. One of the main reason, no deck house anymore, and no more needs for fuel to make the water boiling for crew showers. Right now, however are operated the ships, it is estimated that capacity of containers transportation is exceeding by about 30% the demand. This is not said if this 30% excess capacity is calculated before or after the opening of the new locks of the Panama Canal.

As a result of, some are not afraid to put the below question on the table:  Hanjin: the Lehman Brothers of the shipping sector?… You can find a try for an answer here hanjin & l&b… are they same?… And in the same vein, Bmti comments about the rumors and talks heard at the Antwerp Shipping dinner held last week. “Bankruptcy” could be the word of the year in our sector. If not 2016 maybe 2017. I just tend to disagree with BMTI when they state “whilst the managers keep going, more ships keep disappearing“. For me, it’s everything but not the reality. Yes top managers who very smartly drove the company to the wall will find another job and will focus on getting an indecent payroll on monthly basis without indexing same to the results of the Company. Meantime, Ships are not disappearing from the sea. They just change hands but theses ships will keep trading at sea.

Anyway, on the handy chartering side, things are moving very slowly, all atlantic routes are down, only Asia and FEAST routes are managing to go up, with +122 (today’s index) on the HS5. Why is it so slow? As we are still seeing cargoes on our left screen and ships on the right one, I think resistance is coming from owners. They’re not on strike but I got the feeling they are willing to resist to charterers usual willingness to keep the ball at floor level. Also, with quite a lot of Muslim countries being off today/tomorrow for Haj Pilgrimage and feast of sacrifice, China being off on Thursday, Friday, Saturday, my little finger makes me believe, this week will be and will remain a quiet one. If you don’t wish to believe my little finger, you can still go through this Platts market analysis.platts drymarket analysis. “handies, for Q4, is the most resilient market BUT… I don’t think it would see too much of a spike…” I’m bit more cautious with this analysis “if market players find the right ship/cargo at the right time then money will be good” (9’17”)… a bit like saying “well if tomorrow the temperature outside is warm, it might be a hot day”…. And if I fix today, there will be one ship gone off the market, and so a cargo. That’s my contribution to the market. You’re welcome.




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