Another good excuse is found to explain the lack of activity on the chartering market. (Not that nothing is happening, but what’s fixed is barely proving to chartering market is in good shape). The excuse is now about European holidays coming in (and « sluggish summer industrial tends setting in »). To me, if I were to try to give an opinion, I think this week won’t show much of excitment. We are at the month end. All cargoes which needed to be done with NOR tendered by end of the month are already covered. The july ones, the traders (and so their chartering desk) are in a wait and see mood. View the trading mess we are going through in the world, it could make sense. This is a try to explain but yes I recon it’s a feeling, nothing really scientific behind.
Grains ex french continental port to algeria is still up and running, 3 handies got fixed this week on this trade, not enough to keep the 10 others around busy. Charterers having planned ahead correctly are managing to get $0.50 below previous done. Giving on old style index 28kdwt Imabari type touch above $5,000 daily dop Arag (without counting any days lost on Owners side waiting for the right day to tender nor). Talking about the old style 28kdwt these ships are nowadays the new bargainer for charterers. Stem increased from 25,000 10pct to 30,000 10pct. With ships’ specs improvement the best ladies were the 34/38kdwt fitting into the port restrictions. Now market being full of 30/35000 10pct stems, the little cuties 28kdwt are left in the middle of nowhere with not too many cargoes around. This is the perfect timing for charterers to show again interest on this size. (kind of Mouse and Cat game I was mentionning few weeks ago).
This $5,000 daily on 28kdwt with grains France to Wmed is to be compared to this fixture of scrap done on a 35kdwt aps Hamburg redel Emed at $11,500 daily. Easy to understand owners complaining about the low money proposed by the grains guys. The latters being also easily aware of what their competitors are doing (easy, just talk to the brokers) and shooting on the market their fresh requirement once they’re sure the one from their competition is covered. It would be a shortcut to say they make some arrangements between them (and it’s forbidden anyway). Meantime, from outside, looking like the team work is in full swing.
Given this situation would owners’ salvation be in going through consolidation ? it could be, at least this is the topic mentionned here. Sure the fragmented shipowners market is playing in favor of charterers. However, I still think, consolidation is not the solution, if it’s done only for the purpose of owning more assets (ships), leveraging better access to the banks, get cheap money and at the end put the ships on long period to charterers or to operators. In this scheme, the few big guys will be more cost effective, they will drag down their operational costs but lowering operational costs has never dragged up freight (or I missed something at school*).
Consolidation is also the between the lines conclusion for brokers in this publication read on linkedin .
Now you know everything now, you can watch the solid World Cup games showing up
*Did I miss something at school ? could be.