transition again

The ones of you being BMTI subsrcibers can find  a nice summary of the -almost- over 2016 on chartering. Maybe tomorrow BMTI will send us a nice summary of what’s going to happen in 2017 on BDI, BCI, BPI, BSI and BHSI. Let’s believe in it. BMTI is starting his review with these words :

« 2016 in review – A Year of Tumult and Transition ».

 Sure, the ones of you working in major groups have already noticed during your corporate meetings one of the top managers describing the year with this word « TRANSITION ». You need to know, in this circumstances, « TRANSITION » meanings « financial results are far below expectations and the best we can do is to forget about what have just been done and focus on the next plans ».

But one of the synonym of transition is change… I’m not quite sure 2017 will not again be a Transition year for shipping in the sense of everything won’t change in the next months.

On the spot chartering market, if we accept the idea that Baltic Exchange is giving the daily temperature of the market, then view they are off, we can say market going into any directions… For sure, still some cargoes and ships open and all looking for a solution. But Charterers remain in Christmas gift mood, and expecting owners to give away they ships at cheap level, when to the contrary Owners, being also in christmas gift mood, are expecting charterers to add some USD on their fixing level. According to what we see, it seems charterers are more in position to take advantage of this quiet market.

speed is the limit (Part 2)

Not that long ago I was mentioning here the delta between how quick can the traders switch their decisions when it comes to origin from where they book their stems and the ships speed at sea. see here speed is the limit (part 1)

You’ll have notice Thomas Coville, on his fabulous sail boat named Sodebo, have just finished a circumnavigate, on his own, within less than 50 days. The speed average is at 24knots/hour through 28400 nm (which is the normal speed for a modern Containership). For sake of comparison, Jules Vernes is -said to be -burning 120mt of gaz/day while steaming at 18knots…. going above this speed, the engine is -said to be- burning twice this quantity.

one day, maybe, our bulk carriers will be able to go at 24knots/hour. I strongly believe going at quicker pace is surely not the objective of our ships engineers but to the contrary be able to steam at something like 15knots on average while burning less gaz is the objective. Handy index type, one day, might be described as follow:

• 15knots Laden/ballast on 10mt IFO no diesel at sea
• when today standard index type is 14knots laden Ballast on 22mt IFO

For sake of keeping me busy on this Boxer day, at Sodebo’s speed here you have average time at sea to perform:

• Houston to Gib: @14knots = abt 14 days / @24knots = abt 8 days
• Recalada to Gib: @14knots = abt 16.5 days / @24knots = abt 9,5 days
• rouen to annaba: @14knots = abt 5.5 days / @24knots = abt 3 days
• and so on…

In summary, the world would shrink by something like 70%… Thanks god this would not mean the needs of ships being reduced by the same level as ships are already spending more time in their life at ports for loading/discharging, queuing in the lines up/cleaning hold, also we shall not forget bunkering, drydocking, special survey and all these days during which ships are not at charterers commercial disposal.

Finally the story does not say if Thomas Coville were so quick to perform this circumnavigation, being in a rush to eat anything else than these Sodebo’s sandwiches which you can find in French motorways gas stations. Try one of those once and you’ll understand what I mean.

 

 

 

 

 

 

pre christmas market report

It’s with great pleasure to realize in the last couple of days how creative and modern our industry is. Coming to the office today was really worth it. Reading the Greetings for the christmas period by emails coming from all over the world. Even offices based in countries where Christmas means at least as much as a open sea port in Switzerland is kind of nice and unexpected. The traditional hand written card sent by courrier has fallen into obsolescence. Killed by the emails. GIF and lovely pictures are all coming in.

That won’t make a fixture for today, but according to the tons of emails we got thanking us for our continuous support in the past year and being sure that 2017 will be even more prosperous I think we shall not worry too much for 2017. I just hope I’ll still be able to find the right balance between fixing like a machine and sending you daily lovely reports.

Talking a bit about the market, if you’re too busy preparing the tomorrow midnight mass, let me give you a quick (very quick one) summary of what’s going on :

.Rouen to algeria with wheat on handies for beg january, discussed something like 2usdpmt below the 10 days ago level

.Blsea to Wmed with grains on handies for beg january, something along tce at USD 8’000 daily canakkale is the today’s money

.Blsea to Wafr, despite loads of ships open around level done is remaining fairly high compared to what we could have expected from market with a « within 45 days repositioning in ECSA »

.Handies ex Ecsa, if you have one for beg january, don’t be shy plse propose, most of them seems to be busy carrying the  1’610’000mt Of grains reported being exported ex Argentina since beg December.

My turn to be creative and to wish you a lovely Christmas to all of you and wishing you to have a very good time with your beloved. (Sorry I won’t be able to come, but my heart will be with all of you).

All the best, have a great time and don’t forget next week… I shall be at the office on monday morning to look after your enquiries (unless santa claus bringing me the PS4 which was on the top of my wish list this year)

Jerome

speed is the limit

Sure you had a great day yesterday and you managed to cope with the international theme of the 21st dec, which is obviously also the first winter day.

Chartering market is starting to be looking at 2017, on the bunkers it’s looking like the average for the crude price will be in the 50/60usd range.(something like twice what we have seen in Feb/march this year)

Charterers are pretty graceful, shipowners are not able to set up their own «OPEC» organisation to unilaterally decide to cut « tonnage available at sea » and make overall freight market going up.

Shipowners, open in Atlantic seems fairly happy to realize ships are moving slower than the trading decisions.

When out of a sudden all grains players are deciding to load in country X, thanks to a good bargain on the commodity price, the swapping of origin decision is by far made on quicker pace than « 14knots/hour » and average nice ship is able to make. This difference of speed might be the main driver for making freight up or down nowadays. Data and information can go across the world in less than 1 minute when a ship still need 17/20 days to move from Gibraltar to Argentina for example. One day, maybe, ships will be able to move from Gib to Argentina in less than 2 days… then vsl’s speed will need to be at 120knots/hour. That’s quick, slower than my ferrari (see picture) but still faster than allowed speed in US motorways. I’m fairly sure if some engine builders might be working on this target shipowners will make their best not to make this becoming a reality soon.

Overall sentiment is as you would have guessed pretty slow but still few charterers looking for December candidates, counting on the Magic Christmas spirit to find out a good bargain. On the other side, Owners who are remaining open now, have probably made up their mind and would rather let their crew enjoying a quiet christmas at anchorage rather than jumping on every opportunities.

Have a nice day evening and we remain at your disposal. Tomorrow and the day after and so on.

Rgds

Jerome

 

 

 

is freight looking like lottery?

Here we go. BHSI heads up to 600 today. The only ships size surviving to the gravity. The rally on the route from Atlantic is still not over, Ecsa to skaw pass still moving up by 274pts (@ USD13’472) and USG to skaw pass up by 143pts (@USS 14’700). Again no need to paraphrase what’s very well summarized in Bmti’s « From the Desk of a Continental shipbroker » section. If you’re not a subscriber… you may need to consider click hereAlso if you’re willing to have a summary of the week at a glance, you can read this BDI week 50 report

have a nice week-end

Jerome

Photo credit: @RussianGrainTra

bigger the stronger? not in shipping today

Freight market report in short

Today’s BSI failed to reach the 1’000 points and declined by 7points (BDI dtd 15th dec), when BHSI is approaching the 600pts mark, still 4 points to go while Capers losing 17% / Panamaxes losing 6%

No major changes Vs yesterday. On the Handies, the Atlantic routes keep their movement up and you should read the analysis proposed by BMTI in the attached « handy bulk view point – from the desk of a continental shipbroker ». In summary, our fellow broker is questionning for how long the Atlantic can remain in this direction. Arguing, still too many ships at sea, ballasters from India en route to take their share of the pie ex ECSA and no mention of the USG market.

From USG the momentum is still here however it seems it easing a bit. Back on the ECSA, this one raised our attention « Grain charterers were bidding US $ 16’000 daily on a 34’000dwt for a trip to Med , which numbers make some charterers think twice and consider taking a supramax at US $ 12/13’000 daily instead ». Surely, if the supra can fit into ports restrictions, even with a cut size, it shall calculate better for charterers to look after a 52’000dwt rather than a 34’000dwt.

On the S&P market, with no surprise the price for a second hand 5 yrs old 32’000dwt has increased by close to 30% in the last month. Buyers being more and more confident they’ll make money on the chartering market with these US$ 11.5 million ladies.

While drybulk market remains very fragmented, the container market is mainly controlled by few players  M Skou maersk boss stated in an interview « By 2018 the top five carriers will have about two thirds of the global market, […] The industry does not need any new ships.” Full article  here

Finally we were highlighting to you few days ago the nomination of Miss Elaine Chao to the US dept of Transportation and probable issues in regards to her family interests and American’s ones. Add a ‘s’ to Chao and you end up with a chaotic situation, but this will not happen, right ? full article here Chao(s) in the FOC in US?. Needless to add ProPublica is a kind of American anti-system newsroom.

Remaining at your disposal, we have a decent IT system our side which shall enable us to give you our opinion about the market and how to handle it in order to fix to the best of your interests.

market fundamentals…

No much changes in the main fundamentals on the market. The little ones (Handies and Supras) have not finished they rally yet and Atlantic being the lead dog. Worth to notice today’s BHSI, HS3 ECSA to Skaw passero gaining 550points and heading towards the 13’000 mark while HS4 USG to Skaw Passero, still on the upper movement with +279 points and being today at 14’350. Lack of tonnage available in these areas are counter balanced with quite few (too many ?) ships being open in the European Continental area or
West Med. Counting something like 50 handies circulated in our system open Cont/ Baltic/ Wmed until end december on 24’000/40’000dwt. Looking at commodities on the market for handies. Grains seems to be feeding the USG and ECSA when Scrap and Fertz are from Baltic and Continent.
Black sea seems to be cooling down a bit, according to our understanding, ports and grain berths are fairly well congested. On the bunker, interesting to read that « OPEC may have produced more crude in November than previously thought, potentially undermining a planned output cut [?] Middle East producer club OPEC pumped about 34.2 million barrels a day of crude in November, 500,000 bpd above OPEC’s official estimate, which was already a record. » leading to a price down on the barrel by something like 1.3%. On the charterers/ traders world, Invivo -french cooperative – have announced putting some investments in Brazilian facilities and local business to diversify their tradings and become more active on the corn and soyabeans. Brazil still, Nidera seems to be missing US$ 150m in the accountancy of their local division. See article here,  US$ 150Million hole

So when one says “There are a lot of opportunities in Brazil because there’s a lack of financing,” the other lost somewhere “US$ 150M”. Curious about invivo’s investments in Brazil? the full Bloomberg article shall be on air by tomorrow, and let’s hope Invivo people won’t find out a multi-million dollars hole in the facilities in which they’re willing to invest.

Have a nice evening.
Jerome