green energy not drybulk players’ friends unless we can carry the wind

Good day, good morning,

all indexes today’s are showing green numbers, last time it was green day was on 21st August when BDI was showing 1,266 and Capers 2,584. Bit of a loss in the last 12 business days, but let’s be positive and believe the quiet summer period is behind us.

Market remains difficult to read and anticipate with for example, as mentionned in Bmti today, ex continent to supras been said fixed for similar trade, one at $8,750 and another one at $10,250. Specs of the ships can hardly explain such difference on the daily hire. Difficulties to read the market is also surely due to alternative options on which traders are working to replace their requirements from the USG, where the situation will surely take quite a time to come back to pre-hurricane situation.

When it comes to grains, Black Sea seems to be a fairly tangible option. Owners putting quite a lot of hopes on the Russian/Ukrain grains exports in the next months and ships supras and bigger are managing to get quite good activity enabling daily hire equivalent to be fairly decent, $20,000 daily for a front haul, when the similar route on the supra 58kdwt is said being worth $18,900 today. So far, handies are still struggling to get their share of the pie from Black sea, again this might change in the next days if a swap ex USG is made with sources ex Black Sea.

Should you need to be convinced about the Russian role in grains supply in the next years, please have a go on this article .

Germany will remain a key player to quench your thirst, with their good hop crop , unfortunately, volume we are talking about is surely not enough to keep handies busy all year long.

Finally, talking still about market trends, UK ports are handling less cargoes than in previous years, mainly due to less coal needs and to a larger scale, sustainable energy expansion is not really drybulk players friends, until ships will be needed to carry the wind, and enjoy Paddock’s experience

carry the wind

and if you wonder about shipping gas emissions in 2015 you can have access to this full report , regards

Jerome

 

 

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handies around the world or so

« 38,000mt Ust-Luga to Santos rated by owners at $7/mt when charterers having in mind $4/mt ». $4/mt means total freight at $152,000 for a 6,500 nautic miles & 32/33 days trip. This must be a typo mistake.  The biz is seen here asf « 38000 M/M BLK SULPHUR APP CUST LUGA / SANTOS  25-27 AUG 12000 SHINC / 12000 SHINC 5pct ttl com». $7/mt gives a time charter rate below $0 (so owners paying charterers to have the privilege to carry the cargo). Santos destination might be one the day place to go, place to be but Continental/baltic handy market is far from being close to $0. Scrap from North continent to Emed on similar ships are worth $9,500 or so.

So would make sense to believe chrtrs talking $14/mt (which would equate to $7,000 daily) when owners asking $17/mt, (which would equate to $10,500 daily dely Skaw). This seems bit more realistic figures. Then who’s the most realistic between owners asking above $10k daily or charterers offering $7k daily ? I’m tempted to easily say, both are showing to much ambition and the truth shall be somewhere in between. But you know I’m a broker, that might explain this (very insightful) sentiment.

Further south, ex continent, Grains charterers willing to secure ships in the $5,500/5,750 daily basis dely Gibr via French port to Wmed, when owners are more into $6,000/6,250 mood (this is only $1pmt difference, still $1pmt difference.

Further East, ex Black sea Peas are fairly popular out there, to be sent to India which is not the ideal destination for owners, hence they’re asking for big premuim to end up filled in with Aaloo Mattar ingredients. Here the gap is from $9,000 daily to $14,000 daily, being something like $10 pmt gap. Indians may have to pay up a bit their daily bread and butter.

peas

Black Sea, if we take as right 35,000 grains ex Constanza to ARAG seeing something close to $14.50, this would lead to a time charterers equivalent remainig in line with the last done, ie somewhere around $7,000/7,250 daily dely Canakkale.

Further East, far East to name it, finally, handies are not badly positioned there as they seems to be getting $7,000/7,500 daily which is finally not much worst than Atlantic trades.

To give you some good reading while I’m enjoying a couple of weeks off, you can read the below.

  • If you’re wondering if seaborne drybulk market in 2016 moved 4,86bn or only 4,34bn tons you will not find the answer here but some good insight : http://mrprospector.co.uk/ (I always like when I read people daring to challenge Clarksons and SSY).
  • If you’re wondering what are the plans for the richest man in Africa, and you’re willing to have bit more insight about his willingness to by Arsenal and fire Mr Wenger, you can read this mr Dangote interview here. Sure some of his plans will impact the shipping industry https://www.bloomberg.com/features/2017-aliko-dangote-interview/
  • If you’re wondering what Amazon’s doing in shipping business, you can get some inspirational information here http://blogs.platts.com/2017/08/18/amazon-maersk-clash-titans-container-shipping/
  • If you’re wondering who you should get in touch with @ Pelagos in the 2 weeks to come, just dial +33 1 30 09 —–  and ask for Jean-Charles or Alexandre, the fixing machines. You can also ask for Damienne our post-fixing machine. (they’re not robot and don’t bite). (for the full number, contact me privately on twitter @jeromesorrel or on this blog or on linkedin.

Have a nice end of day.

Regards

Jerome

Capes are not boxing in the same category

Last time BDI was climbing above 1,200 we need to go back to end March 2017. It was a 1 month (grace ?) period above this mark and since then on 5th june 2017, BDI was back close to the 800 mark (819 precisely). Today’s BDI raise is mainly driven by the Capes when all others sizes are still struggling to show some strong excitment.

on 31st july     / today

BDI                  @   965            / @1,247

BCI                  @1,225           / @2,542 (more than twice higher)

BPI                  @1,095           / @1,336

BSI                   @  779             / @  791

BHSI                @  492             / @  465

 

As you can see BHSI is the only size who have been really through the summer lull so far. Navigating around the 500 mark but failing to keep getting the fresh air above this level when BCI is « heading to the sky » if we can say so. Looking at Capers index, last « cycle » was a very quick upward (From 14th Feb 2017 @ 567 to 29th march 2017 at 2,755) and then a slow back down into depressive level (from 30th march 2017 to 10th july, back to 730).

So one can still make assumption like here , « Baltic Dry Index rose to the highest level since April » which is a true fact. However it seems to me Capers and others are not boxing in the same Category. A bit like if someone would have had the silly idea to set up a box fight Mayweather Vs. McGregor. Boxe champion against MMA champion? (I have just been told it may happen soon)

mayw

And getting bit more into details as this market report is about Grains. Their analysis seems to me bit short as BDI is up thanks to Capers and Capers are not well known to be the best ships for carrying grains and according to BDI still, Panamaxes and smaller sisters have not yet really joined the party.

On the handies last working days, market was showing fairly limited amount of fresh enquiries/fresh position and it was mainly driven by opportunities. This week is kind of spoiled already with yesterday looking like an usual Monday with everybody’s coming back from a long break and updating their books. I think next week will be the start for setting up the trend for the 5/6 weeks to come with Owners trying to get away of the beg August level done. Lot of hopes for the handies players are placed on the grains, like on the Russian wheat which is managing to take the majority of the last GASC tender as an exemple (to Egypt) and even managing to have sold 600,000mt (as mentionned to you through the Bloomberg article passed on 14th august). After investigating, the first ship done is mv ‘Ken Goh’ which was reported as follow on 28th july « the Ken Goh 2001 31,939-dwt accepted delivery dop Tunisia 28-29 July at $6,000 for a trip via Blsea to North Coast South America ». On this basis and for sake of running voyage equivalent on the basis of 30,500mt loaded in Novo with 7,000sshex and discharged in Puerto cabello with 3,000sshex the freight equivalent shall be around $20/21pmt. It’s fairly cheap freight if you compare to other routes however surely owners managed to secure a good demurrage rate to cash in once in Puerto cabello and surely owners betting on a good repositionning, with 5/6 days ballast to USG and hoping for a strong USG within couple of months.

Will the Capers be able to bring together with them in their rally the Panamaxes and the smaller sisters is remaining to be seen ? I think anyway, next weeks will be bit less easy for handies charterers, who’ll have to be patient and once again stay tune to try to find out the perfect timing again. A bit like McGregor, he might have to find the perfect timing if he wants to leave the ring, standing.

Have a nice afternoon and we remain at your disposal.

Rgds

Jerome

stranger things is not only on Netflix.

If you really want to see strange(r) things, forget about your Netflix subscription and come and join the shipping Industry. We have full of weirdos in our community, thanks God most of them are nice. Weirdos but nice in a nutshell.

Not sure if you’re in the daily circular of this one, sending few times per month the below nice message:

“Can you please advise if you or your charterers have fully firm negotiable cargo shipments that are ready to fix today? Do you have freight figures in mind or on table? If yes, how much? Thank you for your time. (then details of the contact)*

if you’re in this circular, please do not hesitate to add fix@pelagos.fr in your reply to this smart brokers. Add Pelagos** only if you are giving to these guys your books and full set of constructive info which will enable us to serve you better. If in your books you also have some comments such like “Cargo B, is very touchy, we would rather pay 15% above market to secure the right ship with the perfect position“. Please don’t be shy, send it over also. Trust us, we won’t use these sensitive information against your interests, we might come up with a ship 20% above the market level, but you’ld recon, what really matters, is to have secured the right ship, right?

If you’re reply is “please put me off the list of your message?” don’t bother to put Pelagos** in copy. We’ll simply ignore your request and keep sending you bright and sharps emails, which is our Pelagos standard.

Also I’m wondering few things about this guys sending this candid emails. Why not asking everyday? Is it because, in between he got somebody who replied as per my  above assumptions and then the guy, having few bones to bite is focused on fixing and then coming back on the market once he has fixed many cargoes and ships. If so, the man is a genius.

If nothing fixed in between and nobody sending him anything looking like “firm cargoes fixable today“, why the hell is he keeping sending this stupid email to tons of brokers /operators/charterers? do they really hope to get a reply from a the new comer, the fresh trainee being happy to propose innovative solutions?

That’s weird but maybe I’m missing something. Tomorrow we’ll talk about owners/ owners’ brokers circulating 5 times a day a TBN ship said being open “WorldWide within 3 (maybe 4) months” after the day of sending the position. Is it to get a feeling about the market or just reminding to the shipping community, they’re still alive and looking forward for your fresh firm cargoes negotiable and fixable today? that’s a strange thing, but again I might have missed something.

giphy (1)

To conclude and talk quickly about the market, seems we are right now to the turning point. the summer lull is today and tomorrow. On Wednesday it’s pre “back to school” rush. Be aware and be ready.

regards

Jerome

*If you don’t believe me, I have a record of these messages and they trully exists. They are fascinating, really.

**to get our email adress you can contact us via this blog, via twitter, via linkedin, not via tinder – it’s only for personal use-, via snapchat, Facebook, Strava… what more do you need?

construction fail and that’s impacting shipping also

While OPEC were fairly confident about Oil demand in the next months/year no later than this Tuesday, the International Energy Agency has an absolute other vision and forecasting lower consumption from China and India. As a result, Barrel of WTI is down by 2% and getting back below $50 per barrel.

According to PBES, « batteries are the new oil for ships », you can find more about PBES here,  , I’m not quite sure this will apply soon for the Capers, Perry, on his side, is fairly confident. (obviously, he has to he’s the PBES’ CEO).

Batteries done by PBES (or Elon Musk or whoever) might be used for ship generators enabling the ladies to be fully digitalized. If you’re wondering about digitalization in shipping, might be worth to go through the 17mins of the lloyds meeting held in May 2017 which you should find here “digital shipping agenda”.

And if you’re a trader, still about digitalization you might need this technology to follow the moves on the dry cargoes (currently on oil only) and maybe then have a tool to anticipate commodity prices and future needs.

What’s making our era great is the fact that information is everywhere about almost anything and accessible by absolutely anybody. But no Matter about data available, decisions are still made without questionning about business impact.

Bmti is today’s mentionning a handy ship fixed and cancelled has she could not fit into the new Air draft restrictions to call the loading port (namely Kavkaz or Taman) thanks to a bridge being build up from Kerch to Crimea. We can easily presume Millions of rubles have been spent prior launching this fabulous new bridge (said to be the Most ambitious project of Russia and a multi-billion dollars & 12miles project) shortening road transportation, but none ever wonder if this would have an impact on the sea transport, again this could be funny, if billions of US$ where not involved either ways. Some might need to go back to the school of anticipation.
school

now please take your abacus and let me know how you would rate these cargoes seen this week

  1. 29,000 mts  10 pct mol  yellow peas in bulk 9000 mts  10 pct  mol Berdyansk (7.7m) + 20000 mts 10 pct mol   Kavkaz OPL / 1 sa Calcutta 2500x+3000x/4000x 10/25 Sept
  2. 25/35,000 mts bulk wheat Kavkaz Anch / 1sp Egypt Med 14/18 Aug 5000x/3500x
  3. 1 TCT VIA SAFE PORTS/BERTHS/ANCHORAGES AA AA ALWAYS IWL VIA BLACK SEA (INTENTION TAMAN) TO RED SEA, SUDAN LOA MAX 192M , DRAFT 10,5 M SW
    CARGO BULK WHEAT 35 000 +/- 10 % , SF 43 WOG – DUR 45 +/- 10 DAYS WOG LAYCAN 16/08-21/08/2017

Shall we suggest to chrtrs of the third one to get rid of a « AA » standing for « Always Accessible » before getting into trouble ?

Shall we ask Marinetraffic if any ship is found fully loaded in Taman and stuck there without any exit option ?

Finally, if you wonder what’s the market is doing ? I think he’s just laughing at us and will come back to us on Monday (or Wednesday only).

At Pelagos, we don’t laugh, never. Always serious, doing serious stuff and seriously available to fix your serious cargoes/ships. We are not mickeys.

Rgds

Jerome

dull and lull words of the week in shipping

“dull” is going to be elected the word of the week by BMTI, unless it’s “lull” (for the ones, like me, not being English speakers but more 100% froggies (“lull” = “Accalmie” and “dull” = “terne”). Dull does not necessarly means boring, except in oregon.

Continent/baltic:

Scrap activity is not enough to keep 5 digits numbers on the handymaxes or supras to end up in EMED. unless, again, Black Sea destination is the place to go. Which still again has to be proven. Grains players from this area are taking advantage of this gloomy summer and managing to save $0.25 pmt on this rouen to algeria stem compared to the last done which was 7 days ago. Moving to 3 Nigerian ports ex Klaipeda, according to BMTI, with 40,000mt, is not even worth a small premium, as Olam offering $18/mt (with free da’s at disch I strongly believe). A premium, if there is one could be “be happy I have a cargo for your ship”.

Black sea:

no much changes from what I can see. Still a fairly good demand on Supras and bigger ladies but Handies seems left aside of the road.

USG: quite comparable to Black sea in terms of market sentiment, except the fairly good demand is on the panamaxes and players hoping for Ultras and Supras to be contaminated soon.

ECSA:

we got the confirmation from experts (namely BMTI again) comments I made yesterday about the “northern Confidence” fixture which is perceived “outstanding”.

 

About commodities,

Grains, after French poor harvest last year, 2017 crop is back to standard level in terms of qtty. The humidity and floods seen in France has moved to UK and their crop is likely to be very low. this was mentionned here 20 days ago

 

about 2nd hand market,

Jp Morgan which we have seen buying “en bloc” setaf ultras earlier this year are also reported buying the 82kdwt “united World” japanese built in 2013 for $21.3M.

Shall we expect anything for the next couple of days this week? I would say it really depends who’s most in an hurry to enjoy a long week-end, as most of the catholic countries will be off on Tuesday 15th aug (and so doing the bridge on 14th aug).

Don’t worry, we are not in a rush to go to the beach, we’ll be here to do the recaps while you’re enjoying a spritz.

rgds

Jerome

money money money

Listen to this song again, close your eyes and take it “I” being a ship (not Neymar jr), Neymar could be the rich man… not leaving in Monaco nor Las Vegas but in Paris or around

 

Is checking information and datas enough to understand market, not quite sure…

Today’s bdi is mentionning 2 fixtures with quite really hardly comparable income for both owners.

  • ‘Northern Confidence’   (2016 34914 dwt) managing to get $11,000 daily for  Trip dely Santos 12/14 Aug trip via Recalada redel West Mediterranean

when

  • ‘Strategic Endeavour’ (2010 33078 dwt) is only getting approx $8,000 daily for  Trip dely Praia Mole prompt trip redel Continent

sure

  • Northern Confidence intake is bit better  abt 1.6m grain capacity Vs 1.5 respectively for Endeavour
  • N confidence speed conso is bit better about 2mt Ifo less at sea
  • tonnage demand is surely bit better while open in Santos rather than Praia Mole
  • redely Wmed is bit less exciting than redel in Continent (unless blsea waking up on these sizes)

Are all the above worth $3,000 daily difference on the hire? according to these fixtures it seems so, according to what we can hear/see/do, it seems so Northern Confidence fixture is quite good for owners. And Strategic Endeavour also has to work all night, all day, to pay the bills.

For sake of running the maths, mv’Northern Confidence’ bss 1sp upr to Algeria with agri prods 7000/2500x the voyage equivalent is somewhere around $32.50/33.00 sub final intake.

Finally for sake of comparing size performance, ultramax (All Star Atlas) is said to be fixed last week for a comparable biz ex ecsa to wmed at $10,500 daily but delivery being made in Abidjan (so about 4,000nautic miles and 14 days at sea to be added on charterers bill) which is quite far above the S9_58 route from wafr via Ecsa to skaw passero being worth today $8,923

That’s it for today and Bmti is offering a quite complete market overview on handies and supras in their “bmti’s handy bulk viewpoint” so time to subscribe.

finally should you wonder about why seaways bills of lading being a deal breaker for a potential fixture between German owners and Japanese charterers check here explaining why seaways bills of lading shall be cautiously used.

 

rgds

Jerome