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

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