shipping chartering market report and bit more and that’s scary

Checking at BDI in the last 7 days, Panamaxes are the big loosers this week. Last Friday BPI was very close to 1,500 mark (1,494 precisely) when today BPI is only showing 1,187points. Other sizes managed somehow to limit the damage. Key change is also the Handies index which until now managed to keep going up, and now facing a reversal trend. Owners were hoping at some stage to go on the other side of the 600pts mark, but so far, did not manage. For your records, BHSI managed to get at 600 and above during the unexpected December 2016 surge, reached up to 605 on 18th december. Last time it was above this level, we need to get back to April 2014.

On the handies still, another key change is the softening of the HS3 route, which on April 21st was gaining +183 and reaching 12,944 when today same route is losing 345pts and finishing the week at 12,133. As mentionned yesterday, the time charters equivalent done are even quite below these $12,000 on 33/34kdwat ships.

This « air pocket » is likely to be temporary only and more an anticipation of the long week-end ahead with owners unwilling to remain open for the coming three days. This is however still the proof market remain unbalanced and still in charterers favor. In 2007, the week before a long week-end we were seeing a quick market raise as charterers were the ones being worried remaining open and uncovered before a long week-end. Having said this, 3 days week-end will not prevent vsl’s at sea to keep on going there way and this might also lead to some tonnage pilling up. Next week might still bring headache to owners. With charterers sticking to « below last done » claiming they have bit of time ahead.

For further market comments as usual on Friday, should you need a week summary, you can find it here .

And before letting you go enjoying the long week-end ahead, I invite you to read these two articles found here and there. Whatever the future, it’s scary.

First one, proposed by knect365 maritime is promoting heavily the digitalization of our business, the so call « industry disruption » and proposing you a nice picture of an ideal world with everything being automated, cheaper and quicker. They even warn you (us) : « Those who don’t embrace the digital revolution risk to find themselves out of business very soon. » Better to be aware right ? Full article here

On the other side, tons of people (who surely have no clue about this lovely future and disruption) are warning about the risk of this massive digitalization. Lloyd’s for instance (a well known and unanimousely recognized ignorant players in maritime business), is for instance sharing some scary information also about the paperless work, autonomous ships and all the changes going with the near future « Lloyd’s of London has estimated that cyber attacks are costing companies about $400 billion each year worldwide. In 2015, $2.5 billion worth of premiums were collected by insurance companies globally in return for policies to protect companies from losses resulting from hacking. »

You can find here another interesting and scary article about all the risks linked to the cyber attacks.

when in 2017, to proceed for a freight payment, brokers need to call Owners to confirm and spell sign by signthe IBAN of the bank accnt and then call back charterers to confirm over the phone, sign by sign the IBAN is the correct one. I’m tempted to say don’t throw to the bin yet your fax machine it might be useful still. Time when IT providers will be one step ahead hackers is not yet here.

Have a nice week-end and if you can’t reach us by email on Monday May the 1st, please note we still have our fax machine (send me a private message to get the number) and give a try. Alternatively, send us your drone.

skiiiiiiiii.gif

Regards

Jerome

Advertisements

chartering market – some comments and fixtures seen heard done

Imagine one second, if the shipping and chartering market were surrounded only by wise monkeys, seeing nothing, hearing nothing and disclosing nothing… BDI would be flat and fixing and taking decisions would be everything but not easy at all.

Lucky you, I might be a monkey but not that wise, and once again I’m pleased to share some market information with you*. Really you should subscribe to BMTI daily reports (bmti-report.com). As for instance, today there is no need to paraphrase what’s written and proposed in their reports. With not much to add to the « from the desk of a Continental Shipbroker » section. With some interesting comments such like:

  • Umax got fixed at $16,000 daily via baltic via East Africa redel Durban last week and being worth today only $13,000.
  • Soufflet being linked @ 17usdpmt for a 30,000mt stem of wheat from Dunkirk to Algeria which gives a time charter equivalent @ $11,000 daily aps (to me this cargo was booked already earlier this week at $17.50) and similar cargo is today being discussed around $10,000 daily (and according to me, even bit lower, with charterers having quite nice flexibility on the final intake).
  • ECSA is said to be softening with rates getting down and you’ll find some fixtures information on the bottom of this today’s report.

Please find few figures (provided by ISM) about Argentinean grains exportations : From April 8 to April 20 Argentinean ports handled about 243,000mt of bulk wheat and still nearly 350,000mt of wheat are awaiting their turned to be exported soon. 1.4Million tons of Maize have been loaded and Soyabeans, bit more than 150,000mt already loaded and shipped to China and more than 750,000 are in the pipe to be exported soon.

Talking a bit about grains, again, BMTI comments are what we can also read elsewhere, the lack of rain in the European Countries is hoped to be over soon to secure a good crop for this summer. Shall it remain as it is now and usual big european Countries being grains producers (and exporters) may face a second delicate year in a row.

Finally please find few fixtures which we have heard/done/seen in the last day :

Ex ECSA : Ballasters from West Africa managed to do

  • a 34,000dwt has been booked aps Ecsa for a Tct with redely Brazil (quick/short duration of about 10 days) at the rate around $12,000 daily). Guess Owners took this one and hoping for a better market within 2 weeks.
  • A 32kdwat modern, fixed dely aps South Brazil with a redely in Continent at $12,000 daily
  • 34kdwat from south Brazil to Blsea with sugar is under nego touch about $10,000 daily
  • A supra 52kdwt has been fixed aps Recalada (ballasting from Wafr again) for a time charter trip with a redelivery in Wmed in the region of $14,500/15,000 daily
  • Comparable ship with redely in EastMed, intention Egypt, got covered touch below $14,000 daily

CONT WMED:

  • Supras open WestMed getting « only » $11,500 daily for a 2/3 laden legs with redel atlantic
  • When, as seen today in the Bdi, a supra is getting fixed at $14,000 passing gibraltar via continent with redely Wafr.

USG/USEC/St LAW

  • 33,000dwat from Usec/NCSA is gone at $10,000 for a redely to Black Sea
  • 40,000mt 10 pct of bulk wheat from St Lawrence to Nigeria has been fixed on prompt basis, with a spot supra in the high 20usdpmt on the basis of 7000x/3000c with 2 disch ports. Assuming the da’s and Ewri are for charterers accnt, this shall bring an equivalent around $15,750/16,000 daily… sub bunkers being siphoned or not (http://splash247.com/10-arrested-nigeria-stealing-2000-tonnes-shell-oil/)

 

Have a nice day, evening and we remain at your disposal

Rgds

jerome

*should you want to share some information on what you do/see/hear and are happy to help me to get this blog with more information please do not hesitate to share. Of course, I’ll manage to put a bit of make up on information you’re sharing in order to protect your “monkey wiseness”.

spot market – and forward one

BLSEA : 9’500 dely Bandirma via blsea redel East Med with Coal on a 29,200dwt may probably be perceived as a good rate for owners. But loading coal then ending in EastMed is somehow not that great compare to some low $8,000 obtainable delivery Canakkale via BlackSea to Spain with grains, shall at the end give a better return on money for owners. General feeling in Black sea is a softening market for the handies.

Ex continent/wmed : a real gap between handies and Supras is seen. Clinker cargoes from Wmed to West Africa is said being concluded in the region of $14,000 daily, DOP Morocco. When same destination with grains on handies, owners proposing $10,000/10,500 Dop with 3-4 days ballast included in the calculations. Wheat to Algeria on handies still it’s a bit of curate’s egg. With owners indicating at 20usdpmt or more when the last similar done was fixed last week in the $18pmt region. Converted into Time charter equivalent, it was somewhere close to $10,000 daily aps, when at 20usdpmt it’s leading to $11,500 daily aps (again). I can’t see any good rational explaining a market raise by $1,500/1,700 daily since last Friday. But I might have missed something.

ECSA : seems to be softening (on handies), and it was confirmed by the index dtd yesterday, first time since long ago HS3 back in declining mood, (-16points yesterday) immediately corrected today with + 5). Flirting around the 13,000 daily mark but still not achieved. Last week, 33kdwat on this route was reported done at $15,500, when we have good reasons to believe, below $13,000 was concluded yesterday on similar run for beg May shipment. Was the $15,500 done to convince an April loader to bite the stem ?

on the Shipping overall market, you can get BIMCO analysis/view on how Drybulk and Containers are doing and how they are likely to perform… and what needs to be done to keep owners in position to keep making money throughout the whole year.

For the dry, follow this link / For the containers, follow this one

Spending bit more time on the Dry, few key figures raised my attention, according to BIMCO:

  • owners break even point is when BDI is above 1,280 throughout the full year.
  • Last time this was the case, was in 2011.
  • Average BDI level for Q1 2017 is at 945.
  • Today it’s at 1,154.
  • tonnage demand for grains shipments is likely to remain mainly driven by Soya from Brazil and Argentina.
  • On the second-hand market, big ladies prices has gone up by close to 40% since 1st jan 2017…
  • Which means existing ships are no longer priced significantly below newbuild ones

Finally, BIMCO expecting the demand in the freight market to remain strong until june but shall not last through the summer… this is also confirmed on the future (except on the Capers).

finally, should you have any comments please to hear

Jerome

need to be believers- “I’m the one at the sail, I’m the master of my sea, oh ooh The master of my sea, oh ooh”

…This is part of the Lyrics from Imagine Dragons, song BELIEVER… and believer is exactly what we can find while reading various dry bulk shipping market reports.

Positive sentiment is clearly readable in some market reports/forcast. And some others are clearly bearish on the short/medium term runs…

For expample interesting input and discutable conclusion on this market comment/forecast  made here. Discutable as, if I understood well, Capes’ market has suffered lately from some « minor » accidents which have impacted down the market but basics are here to bring the spring time in even better condition than it is now. But, view how overall Capes market can be impacted by a storm in Australia, or a few days port closing in Brazil, how can we ascertain in May/June/July no other similar events will occur and bring some unbalanced situation again ? Is this market forecast more accurate then ? Being quite bearish ?

Interesting also to read the summary of the stock market for the shipping companies.

  • Navios -3%
  • Safe Bulkers -9%
  • Scorpio -14%
  • StarBulk carriers -21%
  • DryShips -22%

… in the last 5 days.

This might have a link with this info seen here  which plse find qte/uqte « Seven banks impaired shipping loans by over USD 3.4 billion last year, shows a report from Bloomberg Intelligence. There are, however, signs of improvement, which is good news for banks such as DNB, ABN Amro, Nordea, and Danske Bank, which altogether have loaned approximately USD 74 billion to the sector. »

 it’s bit like when we talk with charterers :

  • « market is down, there isn’t much happening around, we shall be able to do « as per last, minus X, I already have in hands couple of owners ready to fight to get my cargo » »

And 5 minutes after when we discuss with owners

  • « Market is on fire, I see baunch of charterers showing interest on my ship, I already have 3 firm offers on my desk, and I tell you, next fixture is going to be « as per last + y on the freight» »

For sure BdI today is not showing great figures, (and so this week)

  • coming down the 1,200 mark (1,195 precisely), losing 100points in one week (4 days)
  • Capers went from 2,220 on Tuesday, now at 1,830
  • Panamaxes from 1,621 on Tuesday, now at 1,494
  • Supras’ can  be said being flately down !
  • Handies to the contrary flately up !

Should you want to have a quick view on the week which is just over, have a look here, I’ve been given to understand, they have some reliable info.

bye for now and don’t forget, you can be master of your sea! (and we can help for this, we are good and nice brokers oh ooh ha haa)

Jerome

post easter shipping continent handy view –

Good day

Handies

« trip from Rouen to Algeria was allegedly concluded at $17.50/mt for a 26,000mt cargo, which if true, is a disappointing average of $8,500 daily »… trust BMTI aim to say « APS »… which gives something along $6,300 dely Gibraltar. I would be tempted to temporize slighlty the « disappointing » fact on this fixture. Bit of information are missing on this one. According to our info similar stems basis 30,000mt have been covered lately around $18.00pmt on modern tonnage (=tce around $7,750 dely passing gib / or $9,750 aps).

So what if the fixture mentionned by BMTI, is a ship being 20years old or even more? isn’t it still a decent figure? (don’t make me wrong, decent compared to a modern Vsl). Can a +20years old  dwt 26,000ship decently hope to get same money as a modern 32,000dwt ?

Also these figures need to be compared with :

  • a modern handy index size said being fixed dop Antwerp redel Arag via White Sea at $8,750 daily
  • Loyalty 30kdwt reported being fixed at $10,300 dely baltic (vsl open there) redel Wafr at $10,300 daily
  • or a modern 32kdwat which were open Tunisia, done dop at $7,750 for a time charter trip to USEC.

Talking about USEC/USG destination

  • Today a similar size ship (32kdwt) from USG to Wmed is worth something -according to our estimate- around $11,000/11,250 (knowing we’ve seen a fixture reported at $16,000 aps USG on a 32kdwat, on which we are pretty doubtfull. Seems to us on the very high side, unless we miss some background on this fixture). Index for such route being at $9,336 daily.

Ex ECSA, handy tonnage avaibility is bit tight for the month end, this may explain the $15,500 daily seen in the reports dely ECSA (Recalada presumably) tct to Skaw Gib.

jerome

*last report on Friday, I was wrongly mentionning for this rouen to algeria « $7,300 passing Gib alt $9,250 dop »… trust you have corrected by yourself and needed to be read « $9,250 aps »…

 

A good and famous joke and the sad reality in #Shipping

You all know this famous joke about the canadian lumberjack and the wise Great Indian Chef… here is it below to refresh your memories

Bob and Doug lived in the northern wilds of Canada. Winter was approaching so they went out to chop wood to keep them warm during the cold months. After working all day they had gathered a respectable amount of firewood and were feeling pretty exhausted. Bob turns to Doug and says

-“Well, what do you think? Do we have enough? What if we have a really cold winter?”

They discussed this for a while and finally decided to ask wise Great Indian Chef  what he thought. So Bob climbed to the top of the hill, found Wise Great Indian Chef and asked him :

-“Wise Great Indian Chef, is it going to be a cold winter?”

Wise Great Indian Chef looked over the vast forest and nodded,

-“Yes, cold winter ahead”.

So Bob went back down and told Doug what Wise Great Indian Chef had said. They worked the night through, chopping down more trees, until morning when they had a huge amount of firewood. Again, exhausted, they discussed whether that would be enough. Bob climbed to the top of the hill and asked Wise Great Indian Chef again,

-“Wise Great Indian Chef, is it going to be a very cold winter?”

Wise Great Indian Chef looked over the vast forest and nodded,

-“Yes, very cold winter”

So Bob made his way back down to Doug and told him what Wise Great Indian Chef had said. They worked the rest of the day through, until they had a mountain of firewood. Close to collapse, they decided to ask Wise Great Indian Chef if it was going to be a very, very, very cold winter. Both of them climbed to the top of the hill and Bob asked Wise Great Indian Chef:

-“Wise Great Indian Chef, is it going to be a very, very, very cold winter?”

Wise Great Indian Chef looked out over the vast forest and said

-“Yes, very, very, very cold winter”

Bob and doug at work

doug

Doug, who couldn’t take any more said

-“Listen Wise Great Indian Chef, I know you are a native Indian and you people know this stuff, but how do you know it is going to be such a cold winter?”

Wise Great Indian nodding

chef

Wise Great Indian Chef looked at them and said

-“If White man chopping bit of trees then winter will be cold, when white man cut mountains of trees, winter will be very very very cold”.

Now you can read the real sad story which you can read in Tradewinds last week

****

 JP Morgan in $500m deal for up to 12 newbuilds Investment bank’s Global Maritime arm backs up bullish stance with expression of interest in newbuilds at Chinese yards April 13th, 2017 14:09 GMT by Irene Ang and Adam Corbett Published in Dry cargo

JP Morgan has backed its confidence in the dry bulk market with an order for up to 12 capesize and newcastlemax bulkers in China, hard on the heels of 11 secondhand acquisitions since November.

Industry sources say the US investment bank has signed letters of intent (LOIs) for the newbuildings with three yards for 2019 delivery. If all three LOIs are firmed up, the order could be worth $500m.

It is understood the deal has been done through Global Maritime, the shipping section of JP Morgan’s asset management division. Privately owned New Times Shipbuilding and Jinhai Heavy Industry are said to have been approached to build four newcastlemaxes each.

State-owned Shanghai Waigaoqiao Shipbuilding (SWS) has been approached to construct four capesize bulkers, although there is some doubt over whether this deal has been formerly signed or is still at the LOI stage.

“Other Chinese shipyards that JP Morgan approached included Yangzijiang Shipbuilding,” said one shipbuilding player. “It also contacted Japan Marine United [JMU]. But it only signed LOIs with Jinhai, New Times and SWS.”

TradeWinds is told that JP Morgan’s capesize newbuildings at SWS would be Tier III-compliant and cost between $44.5m and $45m apiece. The newcastlemaxes at Jinhai and New Times are Tier II and would cost around $43.5m each.

Sceptical observers

However, some sceptical observers suggest that JP Morgan may not firm up all the newbuildings at the three shipyards. One source said: “LOI is just an expression of interest in newbuildings and it does not mean the buyer is committed to the deals.”

Others caution that the deal may have been arranged on behalf of clients of Global Maritime, which works closely with major companies such as the Greek Livanos Group.

However, JP Morgan’s Chinese newbuilding deal and recent secondhand acquisitions would appear to fit perfectly with the Global Maritime cyclical investment strategy.

Global Maritime, headed by Andy Dacy, says its strategy is to “capitalise on historically low asset valuations and the potential for longer-term steady income in an otherwise low-yielding environment”.

The bank has been talking up the dry bulk market lately. JP Morgan analyst Noah Parquette recently predicted freight rates would strengthen through 2018.

He said new sulphur emissions regulations arriving in three years’ time and a major slice of the fleet hitting scrap age early in the next decade would provide “tailwinds” for the sector in 2020.

As befits its bullish stance, the bank has been acquiring vessels. Last week, it was reported to have bought the 180,000-dwt Pacific Capella (built 2012) from Pacific International Lines (PIL) for $27m.

That brings the number of secondhand capesizes that it has acquired since November to four. The other three are the 179,000-dwt True Explorer (ex-K Explorer, built 2012); the 179,300-dwt True Frontier (ex-N Fos, built 2010); and the 179,100-dwt Hanjin Esperance (built 2012).

It has also bought two supramax vessels and five ultramaxes. According to VesselsValue, the bank’s total spending on the 10 vessels, excluding the Pacific Capella, is $183.95m.

JP Morgan also co-owns bulkers with other shipping companies. It has a joint venture with MUR Shipping involving four handysize vessels and is a partner with Norway’s Kristian Gerhard Jebsen Skipsrederi in Bulk Trading with eight Japanese-built kamsarmaxes.

Dacy did not respond to requests for comment before press time.

****

And now The twistted joke

Bob and Doug are top PM NAGPOR investment bank’s management. Shipping crisis has been running for a while with new buildings being cheaper than ever. Bob and Doug are sitting on a baunch of money and are asked by their share holders to find some ways to invest in clever ways to bring back quick ROI/big money. So they went on the shipping market, discussed with some Shipyards and found out they could buy brand new ships at value/unit being 50% below 5 years ago prices. They thought then, « investing in shipping is ticking all the boxes of our objectives, let’s buy some brand new ships. » So they went to shipyard and invest big money in order to be ready, full of tonnage on the market, when the shipping crisis is over and the cycle is back again to Green. Then after securing some good big deals, they went to see some Shipping market experts, asking their opinion about the shipping market prospective.

Shipping experts went to see there usual market analysis tools and said :

-« the crisis will be over soon and freight will be high again ».

Bob And Doug, on these good market analysis went back to shipyards and placed again orders for newbuildings, asking for more ships and negotiating for quicker delivery. Once this done, Bob and Doug went back to the shipping experts, who took again a look around on the market analysis tools they have at their disposal and nodded

-« Market will boom quicker than we thought and freight rates will be sky high ».

Bob and Doug being far from being silly, went again to the shipyards placed new orders and even bought some secondhands ships for a very quick delivery -To be ready when market’s booming again-. Their director starts to be bit challenging about these investments and are wondering if more money shall be put into the system. So Bob and Doug as good banking employees went back to the shipping experts to get some confirmation their strategy is the right one. Shipping experts confirmed, after checking their usual market analysis tools :

-« Market is already somehow already ready to boom. It’s going to be « market is crazy » again. Like in the good old golden days back in 2007 »

Trying to understand bit better Shipping experts analysis’ they asked then to these guys :

-« thanks for your good advises and vision about shipping market’s forecast, we know you know what you’re talking about but may we ask you on which basis you assume shipping market is going to be booming again ? ».

To which shipping experts replied :

« the more PM NAGPOR investment bank is putting funds somewhere, the more PM NAGPOR’s experts are confident in their investments, the more we believe the related industry will go sky high soon »

as a conclusion: nobody really as a clue about what’s close future in shipping looking like. In case of doubt, bet your friends’/customers’ money…

disclaimer