Ready to serve for the game?

Rather slow day today with on one side Greeks being off for « ash Monday » and Latinos preparing the Carnival. This does not prevent the future to go up and physical market heading up also (except Capers).

Not so many fresh positions seen on the « atlantic » side of the shipping market and not so many fresh cargoes neither. Market analysts are ready for the boost not sure charterers are…

Same feeling is read in todays’ bmti report, reporting partly some of the speeches held in Hamburg by the finance guys in the current shipping Finance forum held their. Noticeably, about containers market, major broker declared “Three times since the crisis (2009) we could have gotten out of the problem but we have consistently overbuilt ourselves back into the problem”.

Time being the ball remains on their side and it remains their privilege (on average and in general) to choose which timing to serve for the game.

Have a nice evening and we remain at your disposal

Regards

Jerome

 

 

 

 

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with $13 in your pocket can you buy freight for 1mt of wheat from Hamburg to Morocco?

To the question above the reply is not really, maybe if you have $400,000 in your pocket you can move 30,000mt but here the economy of scale is applying.

Talking about continent :

Bunge talking 11/12usdpmt for 30,000mt grains (wheat?) from Hamburg to Morocco for info, at 12usdpmt bss 8000/5000x this would give Time Charter equivalent at $6,300 dely skaw. We believe market in such area is more around $7,500 daily (at least), which would bring this trade at something along $13.50usdpmt. But as usual, charterers may find a super cheap ship and get what they are aiming for.

 

Black Sea :

Picking up slightly eventhough rough local winter conditions freezing the water and seems also to be freezing traders willingness to take positions without being 100% sure to be get the stem at loadport in time. I think this area needs to be treated with some prudence, view the grains production from Ukrain and Russia, sure more cargoes to come and we might get a big boum of cargoes on the market coming with the defrost. If this happen, eventhough the ice won’t melt in 1 day, we may expect a local market going up quickly and heavily.

 

ECSA :

Has been center of owners attentions lately, with very decent numbers done on spot prompt tonnage, Gant Flair (index 28kdwat type) vessel is reported done yesterday at $8,500 daily dely Recalada. This is $800 above yesterday’s HS3 level. At $8,500 daily this is leading to mid 20usdpmt a similar stem as the one mention on top of this report ex Hamburg (upr to Morocco). For the traders willing to compare the pricing sub origin.

Sure ex upr better not to be in a rush for charterers and surely they’re now hoping for a post end feb surge in this local market. On the grains, the wheat production in Argentina is apparently 3Million tons above USDA predictions (which were around 19Million tons). The wheat season from their is probably not over yet then.

 

Bunkers:

You can check attached market movement. Alternatively if you fancy bit more info, you can go here also http://gcaptain.com/asias-floating-oil-storage-sets-sail-as-market-slowly-tightens/

Have a nice afternoon, evening, week-end.

 

Rgds

Jerome

 

 

 

 

 

all about love in shipping market?

According to our information, the ship which has been fixed for the Dunkirk to tunisia stem mentionned fixed for 26,000mt of bulk barley at us$ 18.25 is ballasting from Rades, perfect position being somehow in the middle of nowhere and anyway ballasting distance to swallow either to go to Black Sea  -about 1,00nm- or Dunkirk -about 2,000nm -. We did not run the time charter equivalent on this specific trade, but grains France to West Med is being discussed somewhere close to the US$ 5,500 daily basis delivery passing Gibraltar. Something like US$500 above market level back on Valentine’s day. Scrap continent to East Med, owners finding proposals at around US$7,500 daily.

Ex ECSA, according to the man who fixed it, a 28,000dwt gone from Plate to West Med at $8,500 daily. Which is a number back to end January, and quite above what Indexes are showing. BHSI on this route is today at US$ 7,714 + 214 vs previous day.

For sure the indexes not showing much fixtures done in the handy segment. And momentum seems to be gaining the atlantic region on the supras and bigger ships.

Few market reports or market on line news are getting kind of excited because BDI is back above 800pts, level on which we were above back one month ago. Either market players are fans of the Method Coué, or they are getting less and less demanding and any kind of good news has to be taken (better than nothing), or which is probably the most rational explanation. Market players was very worried to see market drop in the last month and was so concern to get back to february 2016 level, then when they realized it shall not happen, everybody can have a breath. For your records, on 9th feb 2016, BDI was at 290points we are today at 856. Some positive feelings are always good to take, so please have a read through this on-line opinion :  market is ready for recovery! Really??

For once I’ll conclude with a news related to owners and charterers. As you may have noticed already Bunge is said to be committing (not sure if this is the right word) with Barhi shipowners, said to be « one of the largest shipowners in middle East » bunge and barhi love story

Taking the news without digging in for more details we could try to have a first conclusion : Charterers after chartering in long period ships to cover the market surge back 10 years ago, are considering a new strategy when it comes to invest into ships fleet. But knowing barhi is having on their side a Jv with arasco could it be Bunge objective to get a better access to ARASCO cargoes and commodities needs and putting a big feet into this trading area ? I’m not a PriceWaterHouse consultant but even being a broker, this assessment could probably make sense.

Have a nice day/afternoon and being a broker we give free advises and opinion to the chartering market, hoping this is giving you more willingness to fix your cargoes/ships via us.

Rgds

Jerome

 

did you know?

« low 20usdpmt for 30’000mt grain from finland to Algeria » was mentionned yesterday. Taking Naantali being the loadport, knowing it’s a port subject to ice, basis 6,000 sshex at load and 2,500sshex at discharge would give to owners around $7,500 daily dely Skaw and putting aside ice risk and with no extra days for weather in owners estimation. This « low 20usdpmt » seems to us anyway quite aggressive view the number of handy Ferts cargoes we can see popping up ex Baltic to USG or ECSA. Destination which shall be reasonably more attractive for owners open in the northern Continent/baltic area. Anyway this to be compared to $6250 which seems to be obtainable dop ARAG to Algeria via french Atlantic port on modern Handy, converted into voyage this is worth $14.50/15.00pmt.

This also to be compared to the $7,500 daily obtainable from Northern Continent to Emed with Scrap. Heading to EMED/BLSEA is a kind of a bet from Owners. Situation outthere remains fairly unbalanced with quite few tonnage still open around and grain cargoes getting out slowly (on handies). Rough weather ((or crap inland logisticis) or both ?) leading also to quite heavy congestion. For instance, we know a ship which was fixed begining of february is still in the line up, waiting for her turn to load. This is somehow a good news for owners having ships waiting for their turns… bit less of a good news for charterers in needs for quick movements to supply their plants.

BLSEA and Handy still, 30,000mt of grains to Spanishmed, as usual, 2usdpmt spread between owners ideas ($13.5pmt) and charterers ones. These 2usdpmt meanings something like $1,500 daily difference basis dely Canakkale.

ECSA, on handies, Owners are fairly confident the market is (and will be) stronger in the next weeks. 6 to 7 dollars per ton are the difference between charterers ideas and owners ones. When charterers have already added couple of USD versus their last done. Local market picking is a fact, up to owners today’s ideas I remain doubtful, except for the lucky owners having ships able to tender nor before 28th feb taking advantage of charterers who missed the train of planification ahead.

What else to say about our fantastic shipping and chartering world ?

This analysis here done by Paul Slater is rather interesting. In short it says charterers may have to pay in a way or the other the poor financial situation faced by Owners to make sure their goods/commodities will be delivered at final destination. (as this financial hand will not come from commercial banks anymore). Paul proved in the past being able to bring right analysis about market situation, bit of over doing probably while saying on 30th june 2009 «  I think that nearly half the public shipping companies will be insolvent in the next 12 months » but still right while on same day he declared about Eastwind «the chapter 7 filling is the « first of many to come »». If you’re willing to read his full comments made on this sunny and inspiring Tuesday 30th of june 2009, just read this visionary comment.

Finally another strategic info, worth to be shared: « As of 1st nov 2016, Please be advised that the port and city ILYICHEVSK has been renamed to CHERNOMORSK due to decommunisation. All berth names and numbers remained as previously named ».  CHERNOMORSK  is also a nice summer holiday destination as the picture can show you (but we don’t really care in a chartering market report). Shipping is also about being aware.

In case you need ship(s)/cargo(es)/ freight guidance ex Chernomorsk don’t be shy and propose

Rgds

Jerome

 

chartering, what’s going on?

We could read in some market reports « in continent charterers (looking for handies) have a good choice of tonnage » and we have to say we tend to disagree with this statement. As yes, handies are around but we have also seen few cargoes emerging from Continent/baltic giving bit more choice to owners on their 28+kdwt. Also it seems we are in the middle of a change of grain season. With SBM program ex ECSA which shall kick off, Wheat ex Argentina almost over, Grains ex Black Sea still quite an heavy program to go but weather conditions still seems to be slowing down movements.

on the charterting side, with a larger scope, it seems we need also to focus on what’s going on on the FEAST/ASIA side of world. Activity outthere seems to be picking up, which may lead to a more balanced market. Is it just a small blip for End of feb bookings or is the market on his way to be bit more exciting for owners ? is probably the today’s question.

BDI, 5th session in a raw with positive trend which is somehow a good news.

owners and charterers are on the same boat and have to deal with that

and this boat today is more looking like an old bucket than mister Abramovitch yacht we have to admit.

Today’s report in BMTI mentionning a bit of technical info on the fuels and very low sulphur content. It’s again an interesting enlightment to understand which challenges are ahead of our industry. This very low sulphur emission is supposed to be in place by 2020. I’m guessing for some Industrial, political, economical reasons it’s going to be postponed for implementation at a later stage.

chartering market is remaining worrying. Not much fresh info to pass you today on what we do / see / hear being at some stage under the Pandc clause which shall apply.

ECSA, I’m given to understand, despite the fixture reported on assimina II ex ECSA to med at $6,750 and Panforce ex ecsa to Rotterdam at $6,500, local area for the handies shall become bit tight on tonnage available and charterers being in needs for spot handies might have to face higher numbers than previously done.

Ex Continent, freight done on the handies grains to Wmed are showing everyday Time Charter equivalent dropping down.$5’500 DOP ARAG to Wmed is likely to be reached today or next week.

To take a broader view, basis the index, see the below figures in the last 4 weeks :

  • BDI lost abt 22% of his value
  • BCI lost abt 40% of his value
  • BPI gained abt 3.3% of his value
  • BSI lost nearly 15% of his value
  • BHSI lost nearly 25% of his value

Knowing we are at the end of week 6, week 1 and 2 were not corrected as they should due to the christmas break, and week 5 were off in China so let’s believe these first 6 weeks won’t be relevant for the rest of the Q1.

All in all difficult to be enthusiastic with all the market information I passed you in these reports in the last couple of days. As mentionned yesterday (see here in short but not so sweet ), charterers, (at least Grain traders) are facing this cornelian choice :

  • get big or get swallowed by bigger one’s
  • knowing once you’re big you discover $150m hole in your overseas branch ref this really interesting Bloomberg article here traders pain

Nothing better for owners

  • send their ships to lay up and let others enjoying a potential market rise.
  • or keep their ship in the tramping activity and keep market low

Summarizing our industry into owners and Charterers is a bit of a quick summary, as quite many people/services are in between to make the deals happen. Meantime we don’t call them « principals » for nothing. Brokers, insurers, bunkers suppliers, port agencies, stevedores etc won’t have any job if the 2 above mentionned not existing. Difficult then to be in good shape for these service providers when principals themselves are not in great shape.

Optimism has to remain in.

Market and people are always finding solutions and everything remain possible. Look at Reckitt Benckiser (owners of the Durex brand), they just bought Mead Johnson Company (Baby/children nutrition maker) for $16.6Billion deal. We have to admit it’s looking like a weired combination. Contraception product leader investing in baby market, which is a market being the result of neglecting the use of contraceptives (or shall one be worried about the effectivness of their contraceptiv solutions ?) do they really believe it’s same business and use ?

Up to some extent a bit like if one day charterers were willing to have a better control on their freight and out of a sudden they’re becoming ship operators. As if it would have been the same expertise and the same industry, as if controlling freight costs would have been the solution to all of their money problems. this can not happen right?

Maybe tomorrow owners will invest in trading commodities markets to have a better control on their Time Charter Equivalent. Who knows ? the world is full off opportunities, we just need to be creative as the expensive consultants says.

Have a nice day, week-end and I’ll give you a 1 week break with my market comments being off to check if we can charterer ships in the mountains ! Meantime Pelagos shop remaining up and running and as always do not hesitate to sollicitate us – them for your next requirements/ ships to fix.

Rgds

Jerome

in short but not so sweet – trading -farming – shipping news

In short but not so sweet.

  • Life seems to be difficult for owners
  • Life seems also to be difficult for farmers, in USA (at least), see from Wall street Journal
  • Life seems also to be difficult for traders

Otherwise all going ok here, thanks for asking.

Have a nice reading and day/evening