Side effects of a losy shipping market

This picture above was taken yesterday just outside of a broker main event, and this is summarizing, in a way the joy of the brokers’ life… being positive, at least, apparently all will manage to have their share of the “cake”…

Owners are impatients to get this month of May 2017 left behind and hoping the change of month will bring more activity and market up again. Talking with charterers, it seems it’s also fairly quiet on the various chartering desk and chartering managers would love to be kept bit more busy from their traders. Of course Brokers are in the same mood and any single fresh cargo seen on the market is ending in a battle to get commitment from owners to have a chance to do something concrete by the end of the day. Then, the lucky broker who’s having the right ship for the cargo is entering into a tough time with Charterers playing it rough when Owners being seduced by the unlucky brokers pretending being able to bring better money, better terms, better something, to get the ship fixed with less hurting terms for the Owners.

This is one of the result of the shrinking broking chanel, when 10 years the standard was to have one brokers looking after Owners’ interest and one broker looking after charterers’ interest, today the standard is one single brokers looking after charterers and owners interest (some bad mouths will wish to add « brokers are looking at owners/charterers’ interest AFTER having looked at their own brokers’ interests first » but thankfully none of the people reading this report will even dare to think like this, knowing how priceless is the broker’s added value, right ?). To come back to my point, the brokers’ now need to keep on the thin line when Owners’ are convinced brokers are doing their best to drag down the market, for the joy of getting a fixture and a commission when charterers’ keep complaining about brokers doing their best to keep market going up, to enjoy a better commission.

As mentionned by BMTI today and as maybe some of you have seen in some market news, a new comer « Shipamax » is trying to get into the industry thanks to few millions injected in this NEW and DISRUPTIVE (of course it has to be Disruptive) brokering approach. BMTI author’s pointing out « another plateform to be created by incompetent but cash rich companies » namely Yahoo and PayPal. Beside the fact that big web companies are about to replace role which used to be devoted by banks in the last Century. I’m obviously not here to wish Yahoo and Paypal good luck in their new venture, but hopefully « Shipamax » will do their outmost not to be as weak as Yahoo in the way they are protecting datas they can get from their brand new System and will use firewalls being bit more effective than the Yahoo’s one, reminding to the ones being tempted to give to « shipamax » their cargoes, ships, fixing terms, books, Yahoo managed to get more than 5 billion emails adresses hacked back in 2016. For the P&C terms, please come back or knock next door.

Have a nice evening, afternoon and trust you don’t need this daily report to make any comments on the BDI’s keeping sliding down (to the joy of charterers), bunkers keeping sliding down (to the joy of owners) and what about brokers? waiting patiently for instructions to fix, as always, in the best of your interest, whichever of the side of the board you are sitting.

Rgds

Jerome

 

 

 

 

 

 

 

Does the ship name has an importance for Owners?

Well, it must have. No ships, up to my knowledge has been named “Ocean Crap’ or “rusty bucket” or ‘last chance’. To the contrary, shipowners trying to be creative and positive, to bring good mood and luck on their ships at Sea; For example, Mv ‘perseverance’, this is quite a nice name for a ship, knowing the ship was put at sea in 2013, and still here for trading, current Owners of this ship MUST show perseverance (and resilience also) and have a ‘Long Hope’ for better market for his lady. This lovely 30kdwt named ship is reported today being fixed from Setubal to UK at $6,000 daily. ‘Lucky Trader’ is the owners, for this ship, as trust the loading port is the port of Setubal in Portugal not in Brazil, for your info ‘Perseverance’ is said open in Jorf by the end of this week. At $6,000 aps daily, owners surely willing to have a ‘Pacific Journey’ and then be in good position to consider the 2nd half june cargoes which shall pop up at some stage from Continent or baltic. Surely charterers have still not found the bottom, we have heard charterers, not in rush, very flexible on the quantities to be shipped (from 15,000 to 30,000mt), very flexible on the dates (vsl’s dates from now or this summer) from South spain to French continental port, charterers ideas not even giving $1,000 daily on aps bss for a modern Imabari Handy index type. Charterers might find a taker, one day. But to my point of view their are some limits which shall not been crossed over.

Owners shall be happy to leave the month of May behind them and surely hoping for a revival of activity. Revival may come from India, according to baunch of experts mentionned by BMTI, on the prompt basis, we may have to put aside India as a strong destination, thanks (because off) to the Monsoon season.

Maybe then need to focus somewhere else, West Africa Maybe, more precisely Ivory Coast. Coccoa players might find an interesting info here on investments to be made in the port of San Pedro

For owners who lost their ‘Confidence in Ocean’ and willing to look for other jobs, sorry to say the CCO of Liberian registery has been covered. Interesting to realize, the man in charge has been working for more than 16yrs to promote the panama Registry and is looking after liberian interests from his office based in USA. This is the real magic of shipping. We are ‘Ocean King’ !

And tomorrow, we hope to have better news to share. I’ll disclose you the names of my tweens to prove you how committed in shipping I am.

Rgds

Jerome

 

 

 

 

 

 

 

 

drybulk handies week in summary and the flowers are for Mum

Few info to conclude this week :

Ex blsea : for handies dely Canakkale with redel East med, owners hoping to obtain $9,000 if not then $8,500 when charterers are more in $6,500, try $7,000 mood. To Egypt, handy stems are concluded  in the $12.50/13.00 pmt on standard terms. To west Med, As mentionned yesterday, stem from BLsea to Span med are worth around $12/13usdpmt from cheap port in black sea. From nikolayev, same trade shall be concluded close to $15,00usdpmt.   The industry is hopping to see another kick off for Grains ex Russia, which is likely to happen but shall impact more the Supras and ultras rather than the Handies.

Ex ECSA : Handies open West Africa are coming with cheap numbers to cover another similar run, leaving the owners open locally quite speechless as they fail to understand how the economics can fly. On a 55days duration biz, concluded on voyage, from Wafr to Wafr via Argentina, time charterers equivalent on dop basis is hardly giving more than $5,000 daily revenue (or $9,000 on aps bss with duration about 40 days).

Ex Continent : as mentionned yesterday, Scrap is helping the local activity to remain relatively good for owners of handymax/supras but the situation is quite different on the smaller ladies, ships from 18,000dwt to 28,000dwt are left with poor alternatives. Stay open and wait for some decent money cargo, in which case, owners to be prepared to wait for quite long period. We noticed one being open spot for almost 3 weeks now. Or go for some business and be happy to get an equivalent around $4,000 daily, if everything goes well and right.

Ex USG : the pictures is looking bit better for owners of this handy segment, this has not really impacted the index  with the HS4 getting below the 8,500mark but the physical market seems to be facing some kind of shortage of tonnage and then owners getting more bullish. I shall say relatively bullish, as the rates as tce equivalent remain around $8,500 daily for this route. We shall not be surprised to see a market revival from there in the next week.

Owners at first sight welcoming the oil prices getting down again… until we all realize countries which are exporting oils are the one importing dry bulk commodities… importing if they have the cash for it.

This has been a fairly slow week, with ascension day celebrated in more than 30 countries and quite a lot of players took a rest on Friday. This week-end Ramadan is starting in Muslim countries, -wishing them a blessed Ramadan period-, next Monday, UK, USA and few other countries are closed. Movement shall not be expected too much before Tuesday.

We talked a bit about Glencore this week, you’ll find here, the amount they’re ready to pay daily for a 14/17 months period on a Kamsarmax

reminding you, you can find a summary of the week activity on all size here

have a nice week-end and mum, if you’re reading this report, the flowers are for you, happy mother’s day on sunday

rgds

Jerome

 

 

 

 

lucky you, you have a shipping market digest here

  • Lucky you what we can read in couple of today’s market report was already passed to you yesterday in our (so) bright( !) market report.
  • Lucky you again, if you read the below, you shall still learn few things, such like ex Black Sea: Lucky (or smart) owners of a 37,000dwt managed to book the ship at $9,000 daily for a trip to West Med. Running the tce here, assuming it goes to SpanMed with dely Blsea, loading ex Constanza 8000x bends, this shall give on voyage equivalent a deceptive $12.75/13.00 pmt sub vessel intake as usual.
  • Looking at the list of fixtures reported by BDI yesterday, is a good way to start again to be depressed and to wonder where our luck is gone.

Out of 30 fixtures reported around the world by the bdi yesterday, any size, any origin, any destination, only 8 fixtures are showing a daily hire at or above $10,000 daily.

Out of the 8 fixtures, you have

  • A cape from Nbrazil to Italy via Turkey (so does not really counts, A cape above $10,000 shall not be something exceptional right)
  • A 82kdwt booked for 4-6 months period dely ECIND redel WW (so does not really counts, redel worldwide! if operators having the plan to redeliver the ship in WCSA owners need to cash in now to pay for the ballast from their and come back to a position where he can hope to find decent money)
  • An ultramax booked from ecsa to Philippines (so does not really counts, redel Philippines… the ship will be the 201 on the list to load in ECSA within a month after being redelivered!)
  • An ultramax fixed from baltic to turkey with scrap (ship ballasting from Hamburg and heading to Gdnyia… not sure dop equivalent being 5 digits numbers if fixed aps, so does not really count again)
  • A supra from Wafr to to ECINDIA (so does not really counts, once in ECINDIA what’s next in the plan?)
  • A 47kdwt dely dunkirk via odense to turkey (with scrap ?)
  • 2 handies from Sw Pass to WWCA/PERU (so does not really count, please give me a worse opening position to catch next decent business)

In nutshell putting aside the funky origin/destinations only scrap from Baltic to Turkey seems to be a decent trade for owners, as soon as they are happy to get bumpy holds

Basis the above picture, can the rising prices for secondhands ships be explained thanks to great visionary skills from investors ? or…hoping for luck? or what else ? (I like to believe it’s great visionary skills).

Have a nice day off

  • lucky you again, most of you are off
  • final luck, for those of you reading this report and about to enter into Ramadan period, wishing you a nice preparation of the coming next weeks.

Regards

Jerome

if you’re wondering what are the main superstitions  in the maritime industry, you can have a look here… finally it’s not all about luck but also talent and please don’t get banana.

 

the frog and ox (was written 1668/1694) and shipping-trading

Mv ‘Inoi’ 2010-built 32,301-dwt is reported fixed at $8,000 per day basis delivery US Gulf to Algeria with grains. Taking Houston (being last dischport for the vsl so no ballast) with 7000x in to Annaba with 32’swad and 2500x out, this is giving a voyage equivalent somewhere around $23.50/24.00 sub vsl exact intake. Same destination, same receivers from northern continent, voyage is worth 18/18.50usdpmt, from French continental port, this is worth somewhere between 15.00/15.50usdpmt. To make the whole world tour (or kind off), from Ecsa, we know a modern 35kdwt has been covered dely Recalada to East Med in the region of the mid $9,000. For purpose of making voyage equivalent to Algeria again, bss 1sp upr with 7000satnoonshex, the freight is ending around $30pmt with 32,000mt loaded. Back to USG to Algeria again on 60,000mt, freight concluded is said to be 21usdpmt on TBN bss 10,000x in from Corpus Christi.

Businesswise, it seems all actors trying to get bigger and bigger. Reminding us about the « frog and ox » fable. On the trading side, after Noble as mentionned yesterday which may have became bit too big, the Breaking News is now that Glencore is sniffing around Bunge to find some ways to cooperate. You can find some info about this here and about Glencore’s wish for expansion here

Same applies on the shipping side, Pacific Basin, to name them, started with 19 owned ships back in 2004, today, they’re owning more than 100, and taking delivery of a brand new Japanese built 54,570dwt mv ‘Osaka Bay’. Should you wish to read a bit more about this owners performance, they’re proposing their 2016 annual report on line, here

As we speak the Frog and ox fable might be the overall main reason for a depressed shipping market. Getting more and more ships at sea (to get bigger than the competitor ?) without wondering if the market is able to swallow such tonnage available. more than 300 years has passed since Jean de La Fontaine committed this fable and we still have not learned our lessons.

Does the same target apply in the brokers house ? not sure we’ll need to ask to Clarskons share holders, for sure Pelagos’ main focus is right now not to become bigger which obviously shall not prevent us to make our best to become better (if doable).

Have a nice afternoon.

Rgds

Jerome

 

 

 

 

 

ships pilling up… everywhere?

Are you with me, when reading in the report « ECSA remains under the treat of a delcining[…]almost 200 ships (handies to Panamaxes) able to do June cancelling », this does not mean much right? unless SEASIA/FEAST being compltely dead, as ballasting from Spore to ECSA equals about 30 days at sea. Spot prompt ships around there are not really technically pilling up in ECSA market. Said in an other way, I’m not sure this is a drastic change versus situation which occured few weeks ago. For sure, seeing an ultramax being fixed today at $10,000 daily dely recalada for a tctrip to Morocco does not leave lots of hopes for handies and supras to be able to grasp a 5 digit number for a similar trade.

The main issue does not seem to be spotted in a particular region but ships are here and wherever you look, you have spot candidates able to still do May dates and owners are even ready to wait for beginning of june to get something. I won’t list whole origins but we are clearly back on a worrying market for Owners. Until now, the correction which started mid April was seen as something which had to happen after a nice revival end Feb and March. But sure, the correction can start to be spelt p.u.n.i.s.h.e.m.e.n.t.

As if it would not be enough, big guys, like NOBLE are facing difficult time. When you know that Noble « fixed 352 spot and period charters between 2015 and the end of last year, ranking it as the seventh largest charterer based on fixture volume » (according to data compiled by Clarksons). This is not a great news for the market. Of course, this can also be seen as an opportunity for Noble’s competitors to eat some of their market share. But, to my point of view, owners do not need a chartering market to become even more centralized to few players. Owners don’t need neither their counter parts to face difficult times. A full article can be found here https://www.bloomberg.com/news/articles/2017-05-22/noble-at-risk-of-debt-default-as-distress-spreads-s-p-says

Tomorrow will be another day, wishing you a nice evening, afternoon.

 

Rgds

Jerome

Do shipping market reports all need to be boring to be taken as serious ones?

Is it me or the market ? for sure since beginning of the week whichever the market report / analysis I’m given to read, I hardly can find anything exciting.  For instance, BMTI, which we have subscribed here (and we like that) keeps talking about coasters or any kind of business segment on which honestly we are not really « into it ». Are they lacking of good reliable hot information on the big ladies or is it just an editorial decision, which could have been like this :

BMTI editor’s May meeting

-« guys, on week 20, no matter what’s going on on the market, we’ll talk about coaster and that’s it ».

Thanksfully, the guy there, looking after the Commodities market asked to keep is « Wednesday » commodity batch and here we go with interesting and quite worrying market information. For all the beer drinkers in the industry we are learning the Barley stock is quite low, price of such grain will surely go up soon and for those of you aiming to transport barley via seaborne market, view record low quantity available, we may struggle to keep the drybulk ladies busy with this commodity. As a result, expensive beer which we can not afford due to lack of commissions in… This is quite ennoying.

Surely, grain traders are kept busy today making BOFFER to various tenders in the air proposed by Egyptian and tunisian authorities (to name a couple). In other words, they are taking positions now, for our summer activity.

On the handies in Atlantic, not much changes, Dely canakkale via Blsea to Egypt is still worthing something around $8,000 daily on 32kdwt, when similar size dely Emed to Caribs is being worth $8,000 for the first 45 days and then up to $9,000 for the extra days, if any, knowing it’s Cement might explain the relatively high daily cost. ECSA on the handies still seems to be fairly quiet, coastal buisness seems to be the only firm movements available for owners and when one HS3 route is available, this is getting fixed at loosy level touch above $9,300 daily. Ecsa, Supras figures are not shining neither for owners, sugar at $9,000 from Santos to Bejaia, shall bring something close to $20pmt on voyage equivalent with quick terms.

Beside these, what else to say ?

100% electrical big ships, are starting to hit the sea. Leclanché is launching a ferry able to sail 60 nautical miles with more than 200people on board and 30 cars and max speed at 15.3knots. Yes I agree with you, 60 nautical miles, remain kind of peanut. What’s not said neither by Leclanché in their brochure, is how long does it take to refill the batteries to be able to sail back…

On the shipbuilding side, top 6 Japanese yards are said to be « fully booked with orders until 2019 » when neighbours (China and South Korea) still have quite a bit of work to fill fill the books until 2019. More details here regretfully, the article is not mentionning whether the « top 6 japanese yards » have managed to secure orders until 2019 at the Japanese standard price or if they had to discount and propose a Japanese built ship at the price of a chinese one.

Whichever the price finally agreed, we can suggest to japanese yards to take their time for building up these ships and make some arrangements for delivery in 2020 only, an east way to fill the gap in their order books for 2020.

Konbanwa

Jerome

and in case you don’t know this boring song from Pink, here you go