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

 

 

 

 

 

 

 

 

how to shine at tonight cocktails in Athens and around?

So you know what to say tonight your cocktails parties in Athens or around while suddenly someone is asking you

“what do you think about the market?”

please find couple of fixtures reported today in BDI about Pacific/SEASIA handy market

‘Asia Pearl VIII’ 20 0 9 35283 dwt dely CJK 16 /17 Jun trip redel SE Asia appro x. $6 ,0 0 0 daily – cnr

‘Atlantic Ruby’ 20 12 336 80 dwt dely Thailand pro mpt trip redel S Ko rea/Japan $5,9 0 0 daily – cnr

Proposed question to start dialog:

“don’t you think chrtrs of Atlantic Ruby overpaid a bit to much?”

and in case you missed it, this one is still in force, just change Eisbein/hamburg by Greek shipbrokers diner/ Athens/Piraeus and you’re safe

« what do you think about the market? »

 

rgds

Jerome

Greece the center of the (shipping) World

A slow Monday, as we could have expected, with little fresh enquiries seen on the market and the usual game with charterers waiting for the last moment to cover their stem and owners resisting as long as they can knowing the indexes shown on Friday were all back to positive and upward trend (putting aside the handy which was flat). In such circumstances, Owners like to believe we reached a turning point and coming days and weeks will be more favorable to their finances.

Greece will be again this week the center of the chartering world, with the Greek shipbrokers’ diner which is (finally) held by the end of this week. Tons of brokers around the world will make the trip to Piraeus in order to do the usual and important networking job.

It’s rather important for the chartering world to meet the local owners and shipbrokers, when you know the importance of the Greek shipping community and how Greek Owners are managing to go through this tough time.

Few figures and example :

  • In January 2015, Greek-controlled ships totalled 180.6 million gross tons (gt) and accounted for 15.4% of world tonnage, according to figures by Clarksons. By last month, it had grown to 209.4 million gt and 16.4% of the world’s fleet.
  • In the meantime, Japan (2nd biggest shipowning nation) widended by 2% to 3.6%
  • German fleet, dropped from 7.9% to 6.7%
  • Newbuildings 17,4% done by the greeks in 2016 / 19% in the first 2017 quartery
  • Secondhand, one fifth of the total deals are bought by Greek shipowners (clarkson’s data)
  • New BIMCO president is Greek Owners

 

For those of you thinking, Greeks are spoiling the market with newbuildings and keeping 2nd handships at sea, worth to say

  • Greeks have been the busiest demolition sellers in 2016, with 17% of the scrapped fleet provided by the Greek Owners
  • Greek Owners scrapped their old ladies and bought on average 8yrs old ships (while the average on the 2nd hand market is 12 years old) (source Clarkson’s again)

 

According to above figures, the Greek Owners’ community is in the place and ready to supply the market with good ships.

As a consequence this week might be kind of a slow one on the index and fixtures movements, with brokers being busy doing the networking and you can also bet quite few charterers out in Greece to also do their piece of work to prepare the next months and years.

Have a nice afternoon

Rgds

Jerome

 

 

make ships desirable… any strategy?

Make June the end of May, was the english plans during the elections which occured on their side of the chanel yesterday, it seems May will last longer this year. But I’ll refrain myself to make further comments as we are not here to talk about politics but only about shipping right ? On this basis we can’t talk neither about the host of the 2022 Fifa World Cup, namely Qatar ? Eventhough the local political situation is putting a mess in the shipping Industry ? lucky drybulk players, most of the additional costs, change of plans will mainly impact the tankers, LNG carriers and containers ships. You can find couple of articles about the various impacts to be expected  and here

Back about the chartering market, as mentionned by ISM (which again you should also consider about subscribing to their daily/weekly market reports (more info here http://me-freight.com ))37,000dwt passing Canakkale via blsea is worth $7,000 daily, on smaller stem (25/30,000mt)Odessa to Egypt is worth something along $11.50usdpmt with Grains. Likely to be wheat, ergot free ? remain an open question for those of you who followed this saga. From Blsea to Brazil an handy stem is said to be worth something along $18/T.

And finally, as fresh chartering information is difficult to gather today I’m inviting you to read this opinion wondering if « shipping is a commoditised business ». By reading the article, it appears lot of Owners would love to make their ships and service unique and desirable while at the end, the market rules are mainly only focusing on freight price, whichever the colour of the hull of the ship or age of the Captain.

Have a nice day week-end and reminding you, we’ll make our best to make your ship/cargo very desirable for charterers respectively Owners and secure a lovely deal.

Regards

Jerome