quick market report before a short break

Glencore is apparently now obtaining « below $15usdpmt » (hence below their fixing ideas) on this Dunkirk to algeria, bulk wheat stem of 30,000 5pct, which if true is a rather good sign for charterers in need to move their grains from continent in the 10 days to come.

Sentiment from Black Sea remains relatively mixed. The locals are all awaiting the new grains season to kick off, however, good owners are able to obtain Dop emed around $5,500 for a trip to continent via blsea w/ clean cargo on 32kdwt. Dop Odessa to Egypt, same ship size is done at $6,500 daily.

ECSA, Yangtze Dignity 32kdwt is finally said fixed at $10,500 daily for a trip to Wmed dely DOP Paranagua, assuming the ship is able to load 30,000mt and loading in 1sp upr with 7000satnoonshex terms to algeria with 2,500sshex out, this shall bring on voyage equivalent something around $30.00. It remains quite a good number for owners.

What else in our fantastic world ? is it worth to tell you we have, here in France, a new minister of transports who declared during a meeting in front of french logistic professionals « I want to make french ports more competitive ». See here This is a great news, thanks Elisabeth for declaring such. Any readers who have heard a freshly named minister declaring « I’ll do my best to make ports under my authority less competitive, I’ll try hard but I’m confident I’ll succeed » ?

whatever the politics, let me wish an happy 150 birthday to Canadians who might read this. As a gift, I’ll let you have a week free of reports and will come back to you on Monday 10th july. Of course, Pelagos team remain on the deck while I’m on the beach.

Rgds

Jerome

 

 

 

 

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Only Greeks shipowners can claim to be Greek Shipowners, they are gifted about timing.

Dunkirk to algeria, according to bmti, on bulk wheat stem of 30,000 5pct with as mentionned yesterday 15,000c at load, « charterers are proposed tonnage at $15.75, but charterers kept silent », probably thinking « time will help to get better offer on the plate ». In the last weeks, on this specific trade, owners managed to keep the freight level relatively stable.

From Black Sea, once again, handies looking for grains are all jumping on the very few stems out and ready to do $6,500 daily dely Canakkale with redel West Med.

Also an interesting quick focus is proposed on the Great Lakes /st Law area where, it seems, but might be worth to cross check info, not enough activity there for owners to be happy to end up in this area. Again, at least on the grains, trust need to wait a bit for the excitement to come in.

About excitment, few weeks ago I was daring to say « Greece is the center of the world when it comes to shipping », you have here some info on greek fleets on greek owners, despite today’s bmti report on S&P, mentionning they ‘only’ invest worth $58.3 mio in 3 ships (2 modern 58kdwt gone at 25mio each and one japanese 32kdwt gone for $8.3mio).

Finally, mister Nasser, BHPBilliton’s boss could have get better inspiration (by asking to Greek owners (for example) if the timing is right for investing) before spending $20Billion in US Shale. Asking to brokers? don’t even think about it BHP do not need brokers as you know. So no need to wonder why BHP is cutting shipbrokers commissions (they probably gave away all of it to the finance experts who made the US shale’s acquisition done).

Have a nice afternoon and should you have some off market cargo/ship to fix, we’ll get excited to sort it out.

Rgds

Jerome

Where is Waldo?

Is it a sign stating market is in very good shape? while you’re receiving a circular from brokers based in singapore sent at 11.00pm local time being as follow:

“CAN ANYONE HELP US TO REACH OWNS OF BELOW VESSEL? WE HAVE SPOT CARGO FOR HER” and then name/specs/position of the ship…?

Owners are so confident about their ship’s attractivness  they believe it’s worth to hide and invite for proposals, eventhough this said ship is SPOT… or Owners being Maersk and out of IT system? the brokers in Singapore shall have proposed a reward for the one bringing him the ship, such like double commission if fixed or nice diner out if not fixed, not sure what but for sure something.

on the fixtures reported, today’s mv ‘AQUATA’ fixture raised our intention, this 46.5kdwt built 1999 said fixed daily Recalada to Algeria with grains at $12,250 with laycan 29/30 june is looking quite good for owners. Putting aside the waiting time to tender notice at loadport which may apply for any grains shipments in Argentina, basis 7000satnoonshex at load and 3000sshex at discharge and 40,000mt loaded this shall end up to a voyage equivalent close to 25/26usdpmt. This handymax fixture is to be compared with either what we heard today 33,000dwt said fixed for 10th july at $10,000 daily bss Dely Recalada for a tirp to NCSA or 58kdwt fixed in the $11,500/$11,750 range for a trip to continent.

Ex continent/Baltic, West African traders will be interested to read a 35,000mt of wheat ex German Baltic to 3 ports in Nigeria (assume 8000sshex /3,000 satnoonshex) being worth somewhere close to $27/mt when again 30kmt wheat from Dunkirk to Algeria with 15,000c /2,500x is targetted by charterers at $15,00 while holding $1 more. Converted into TCE, charterers ideas are Dop Rotterdam at $8,600 when the $16.00 equal to $1,000 more on daily bss (bss ship able to load 30,000). At more standard loading terms, ie 10,000sshex owners TCE is at 17usdpmt (and charterers equivalent at $16)

Overall, marketwise, BDI is offering you here a worth to read summary of the shipping market.  with some limits in their assumptions such like “bunkers prices increases […] which is likely to happen continuously over the course of 2017”. This assumption still have yet to be proven, 6 months to go to be right.

Regards

Jerome

 

 

 

 

 

drybulk shipping market and trading commodities

As mentionned last week, seems owners open with their Supra bulk carrier in east Med are chosing to ballast their ships towards Gibraltar/continent hoping for better market conditions. Likewise on the handies, owners seems happy to leave the black Sea region to west Africa for time charter equivalent below $7,000 daily (dely Canakkale). Handies from Black Sea to Span Med with agri prods is hardly giving to owners more than $5,500 daily bss dely passing Canakkale.

For time being, the continent on the handymax supramaxes market is remaining relatively balanced with ok numbers obtained for non agri businesses. Scrap on 54kdwt can be fixed on dop uk bss with redel Turkey above $11,200 daily. Quite similar cargo but being covered passing gibraltar  is worth $8,500. As mentionned, with Cement 52kdwt got fixed from Continent to Wafr at $8,000 daily, which is not great compared to grains to same destination which shall bring numbers on handymax quite close to $10,000 daily on dop basis. Owners, as often, trying not to show too much enthousiasm for Wafr destination, claiming it’s not easy area. Meantime, they quickly realize, ECSA market is showing some signs of strengh right now and hoping for the trend to last. Is it going to last ? if so up to when ? We understood 38kdwat got fixed and failed ex Argentina to Dakar at the impressive number of $14,000 daily to North West Africa (relatively impressive as the fixture did not materialized) and this to be compare with 32,000 dwt being done for something similar touch above $10,000 daily.

Is USG looking promising ? Sure, the local players still need to pay quite a premium for handies to end up in WCCA, as  we heard a 33kdwt grasped $15,000 daily and as a proof of confidence being on Owners’ side (or lucky owners with lack of competitors and good timing), ultramax obtained more the $20,000 daily to got delivered in SW Pass (after ballasting on his accnt from Gibraltar) and to end up in FEAST.

For the Bmti’s followers, the 39 industry players are at 60% confident bulkers rates will show some signs of recovery in 2017. We can obviously put a question mark about the relevancy of the panel which is only 39 people, not quite sure if this is enough to be a scientific poll. Also these 23 people (being bullish) might have read this interesting Newbuildings report proposed by BIMCO stating in summary « The orderbook for the dry bulk shipping industry has declined from 185 million DWT in July 2014 to 61.3 million DWT in June 2017. This is the lowest orderbook level since April 2004 and indicates that a higher level of deliveries is being made every month, than newbuild contracts agreed. »

Should you wish to read the full document, you can find it here

Finally, when the kick off for the grains harvesting season is already passed in the Northern Hemisphere, you can go through this publication from Danone’s CEO, starting with this strong catch phrase « Food is a human right, not a commodity ».  The subject is too serious to allow to be fully cynical meantime, Danone is a company being a food maker, transforming Commodity (Grains/dairy products/cocoa etc…) into food. And of course a Company like Danone need to buy cheap (and quality) commodity to process this into food providing best margin for the share olders. This is from the supply chain. On the consumers side, Danone need to show to their consumers how concern they are about their social/environmental responsibilities. Not sure the ABCD’s would be ready to swap their companies motto from  « commodities trading » into « human rights trading » and as mentionned by mister Faber in his publication : « Economy without social progress is barbarity. Social progress without economy is utopia. »

Tomorrow we can do the same thinking process with Owners and seafarers, as you surely knew it was on Sunday 25th june « Seafarer’s day ». Did you know in 2017, only 6% of the seafarers have access to on-line video to talk to their families while at sea? unless tomorrow you want to talk about digitalization of our industry… trust there is a starting point here !

Regards

Jerome

have a shot before considering quitting Shipping

Very simple question for today, why bothering buying and trading ships, buying and trading commodities, trying to fix principals ships/cargoes when you can simply create your own tequila brand with your best mate, back in 2013, and then once willing to move to something else, sell it for $1billion? And if you’re willing to reply is “because I’m not George Clooney”, I’m sorry but please try harder with another reply. The story does not tell if Diageo, the new owners of this Mexican product will be able to import these bottles in USA without too much taxes. We’ll need to check with Mr  Trump.

Have a nice day and you can still read BMTI or any ISM reports or any other good source of info you may find to know what’s going on in shipping, don’t forget a second hand Capesize built 2012 is worth usd 30.3Mio. How many cases of Casamigos can fit in this ship, probably more than the volume of this brand sold/year.

Jerome

 

Confidence in chartering & shipping

Is the handy market getting similar to the coaster market? Becoming mainly a positional market (some would say technical market) with the main market driver being the match and balance in between ship position and cargoes requirements? Forgetting about what some would call fundamentals of the market. We got the feeling here, there could be quite big difference on money put on the table on similar ships for similar trade from one week to the other. It’s also difficult to count on index trends to give a real picture on what’s going on and where market is heading towards. Bad timing can easily lead to a 20% gap on the tce equivalent from one week to the other.

Talking about fundamentals of the market, you can have a look on the Oil prices on which OPEC’s struggling to control anything apparently with the barrel down below $46 and US Crude oil below $43.50. Confidence is lost in the oil world. When in the shipping world, confidence about a better market is going up and said as follow “Shipping confidence hits three-year high” from 5.6 recorded in the previous surgey held in Feb to 6.1 on the last results (out of 10.00). In details

• Brokers confidence from 4.6 to 6.4
• Owners confidence from 5.6 to 6.1
• Charterers confidence from 5.9 to 6.4

I’m still struggling to make some conclusions on this results to be honest with you as I would naturally put the “confidence concept” from Owners point of view being probably the opposite as the “confidence concept” in charterers’ mind.

It’s also bit bizarre to have Owners confidence going up, thanks to 14% of the financial costs improvements when owners are well aware they’ll have to face few expensive upgrades on their ships in the coming months to fit in with the IMO regulation.

Also 52% of the respondant are betting BDI in a 12 months time being in between 1,000 to 1,499 when as a benchmark, in the past 12 months, 77% of the respondents are confident BDI will be in between 1,000 and 2,000.

BDI managed to be above the 1,000 point mark during 3 months in total (firstly from Nov 10th, 2016 to Dec 13th 2016 during 1 month, then from 7th March to 7th May with a peak at 1,324 on march 29th and the bottom at 580 on june 20th 2016, exactly one year ago.

Is this confidence concept, only an optimistic point of view and a state of mind to say “can’t be worth anyway”?

Shoud you want to check how confident you can be about my above comments, you can still go here and surely soon the full survey here (only last one available on line at the time of writting this)

And if you’re asking me, I’m really confident we shall be able at Pelagos to fix few ships and cargoes before month end (and let be crazy in the next 12 months). I’m also very confident readers of this report will keep giving us their good support. which is a good start, right?

Have a nice afternoon

Jerome

need a rolls remotely controlled? Royce doing it with ships

 

Good day, good morning,

Long time no speak, hope you had a good time and you missed this daily market comments.

Starting with the index, the last week drop has been mainly driven by the Capers which lost 332pts in the last 7 days of quotation (from 1,442 to 1,110) tried to be balanced somehow by the panamaxes which managed to gain 152 pts (from 865 to 1,017) while supras made +52 and Handies made +17.

on the handies, very little amount of fixtures were reported in the last few days, making it difficult to have a real feeling on how market’s moving based on the Baltic Exchange.

Continental/Baltic market is fairly active, especially for the +35kdwt getting fixed fairly quickly with relatively decent numbers. Towards Emed, Owners getting close (but still below) the $10,000 mark daily, need to be a +45kdwt to get $10,500 daily. Smaller sisters  towards USG getting above $7,000 daily. Noticeably grain activity is fairly low and the market there is driven by the scrap or clinker or iron ore… Obviously hard to get a bargain for the few grains traders open around in Continent. Making the Algerian destination not really exciting for owners.

Blsea/Emed, handies managing to get $10,000 dop Istanbul if the destination is a ‘funky’ one, like Lagos (the Nigerian port not the Portuguese Lagos). Heard a 32kdwt was done on a 25,000 10pct grain stem few days ago bss 8000/3000sshex bends at touch above $24.00. Once again this BLSEA region is showing very limited activity on the grains. Ended the stock for last crop, awaiting for the new one to come in and taking advantage of this transition period for silos maintenance.

For these two above origins, might be worth to be cautious for the charterers, next weeks might be the waking up for the grains and if all are doing their “coming out” at the same time, while scrap remains active from Baltic Continent, local market may get steadier.

USG/USEC, is fairly active with WCCA/WCSA destination, offering kind of good numbers for owners around $12,700/15,000 but once finished there, Owners’ better off having a plan in their books to find next employement for the ship. Ex USEC very limited amount of cargoes proposed for the handies and when one showing up, charterers better off not disclosing their ideas and waiting for a boffer beating the boffer they already have in hands.

ECSA is managing to keep local owners busy but not enough to drive Tce towards Med/blsea at 5digits numbers on the handies/handymaxes.

Today’s BMTI in their “from a desk of a continental shipbroker” is mentionning some Owners trying to put some make up on their fixtures to make it more into their favors and trying to drive market up. Nothing which is unusual, really. Need to be very candide to take as granted 100% of the times figures reported being the actual ones. Trust everybody’s doing it, charterers shaving by few cents / dollars what they’ve done and owners inflating the tc equivalent… It’s more difficult for players being on the market with cargoes and ships in the same time in the same area!

What has not inflated is the share value of Dryships Shares, I did not run the % mathematic but it seems “DryShips shares are down over 65% in the last month alone and have dropped 99.85% since the beginning of the year“. See more info here .

Time to invest in ships then? this is what JP Morgan believe it’s wise to do with others’ money. Anton Pil, might be able to buy a Rolls-Royce* with his bonus.

*a rolls-royce ship, not the Phantom, being too much 2003 style

rgds

Jerome