21st sept : themes of the day.

Amusing -not sure if it is the right word- to note that today’s 21st september is both International Peace’s day and at the same time International Alzheimer’s Day. Is the timing a coincidence ? I bet no, surely one has forgotten about the other or one prefers to forget about the other. Anyway we are here to talk about important things right ? Shipping, Trading, Chartering, Fixing.

Once again, I find it rather difficult to get the inspiration today to make some chartering market comments based on various discussions I have with our counter parties or while reading Chartering market reports.

Yes, we can agree with this statement on Panamaxes « slowly but surely they are emerging from the shadows ». At first sight, looking only at the BPI, being only up with 7points yesterday and +16 today , Panamaxes are not yet to be tanned, but focusing on the various routes, the skaw gib transatlantic round voyage was gaining +91pts, today +146, the skaw Gib to Taiwan/Japan route gaining +54  compared to today +175 and this route is now back above 10’000$ daily value and the transpacific round voyage was up by 70pts yesterday, up by 200 today. This seems to be enough for some positive sentiments. I would not be able to tell if this upward on the Panamaxes is the logical next step after the Capers being up quite heavily but one is surely going with the other (bit like 21st september international theme of the day).

Talking about the capers, they keep up going up as today, the BCI is above 2000, heading to 2118. For your records, on 1st of september BCI was at 1’002 and yes today’s it fairly difficult to remember when was the last time BCI was above the 2100 points. I’ll check for tomorrow report.

The Baltic exchange panellists are not bringing enough good news to see the same upward on the Supras (today +2) and the handies (today +1). Again, worth to go a bit into details, HS3 (Ecsa to Skaw pass) is back on positive trend with +120 heading at 5’483$ daily. BSI routes are all in positive mood except the S4A USg to Skaw pass, getting back below 9000$ daily, and losing 90pts today.

Surely, these figures and this general positive trend feelings will bring some confidence to owners whichever the size, whichever the trade and they’ll keep trying to resist to charterers ideas. I would not be a broker, I would have said, at some stage they have to resist, as it is a matter of being in position to see the 2017 year from the window of their office. But, I’m a broker and I can’t say or write it otherwise, charterers would challenge me and ask me from where do I get my commissions from. So to avoid this unpleasant question I don’t say and don’t write it, I don’t  even dare to think about this suggestion.

Talking about « going through Q4 2016 and being in position to see 2017 », we could read that RBS (Royal Bank of Scotland) « might wound down its shipping business but not sell it, 5 Billion Dollars worth of its loan portfolio – three billion involving Greek loans »

Chartering market might have read this article about shipyards difficulties hard time for Korean shipyards. Buying a second hand ship in February/March this year was said to be a very good timing. Q4 could be even a better one.

To end up with chartering, 2 comparable handies reported fixed from Continent to USG with 1 week in between means $1’500 difference daily, difference in favor of the later one fixed. Maestro Diamond, said gone at 7’000$ daily from N Spain to usg via baltic, may also most probably bring owners to consider Baltic to Wmed at least in the 8’000usd daily.

Have a peaceful day and don’t forget we are at your disposal.

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idiots never die…

Chartering market is clearly driven by the Capers, almost +200 in the BDI index dated friday, today again +173. Today, all indexes are in green and showing a positive trend. + 1 on the handies or supra, remain something positive. And nowadays, it’s important to be positive, otherwise, no point to go to office.

If you’re missing some really negative view on the market, then we invite you to read today’s BMTI section called « The point of no Return ». It’s abyssimally negative. please find few quotes here:

  • “shipping industry is in financially bad and dangerous shape”
  • “the situation has become increasingly more fragile”
  • “steadily building a huge pile of uncontrollable debt”
  • “idiots never die”
  • People don’t seem to learn from mistakes”

Of course, the worth is that we will need to cope with idiots for eternity!!

Is it reflecting exactly the state of the market ? I don’t know, but surely an upward on the chartering market for this Q4 will be more than welcomed by Owners.

On the handies, very limited amount of fixtures came up to our ears Friday and today. We understood Bunge did 16+ usdpmt from Hamburg to Algeria with 2500x out and usual restrictions. From the continent, scrap cargoes trying to keep Supras busy, DOP figures are obtained by owners, but the daily hire is remaining below the 9’000usd daily, for a trip with redely in EMED for candidates open in ARAG, down around 6kusd pdpr for ladies coming from West Med. Ultramaxes in the Black Sea region are obtain around 10’000 passing canakkale on average for trip with redely in the Pacific Basin. From ECSA, modern 56000dwat open south Brazil has obtain 9kusd daily aps Recalada for a trip to Algeria.

Talking quickly about wheat, gasc today’s tender remaining with no offer as none willing to commit themselves with no ergot in the stem. This is having surely an impact on the wheat price but also on the shipping sector, knowing Egypt is the main wheat importer in the world, and most of these are coming from russia. In case you’re interested to have a wheat world picture, you can read this article here Wheat world

Alternatively, if you don’t have access, please find attached few charts from this article

worldtopwheat-importers

russianwheatwheatglobalprod

Remaining at your disposal for the recipes of nice french baguette

 

looking for the next king of Egypt

 

We have not talked yet about Bayer/Monsanto new set up. If you’re not up to date please find a quick summary  here

in this article we can read “We are entering a new era in agriculture — one with significant challenges that demand new, sustainable solutions and technologies to enable growers to produce more with less,” Grant said (Grant being one of the bosses involved in the deal).

For French speakers, you can listen to this edito done yesterday morning in a national radio , here also stating in nutshell, in my words:

In other words, grain producers may have more headaches while trying to negotiate their terms and conditions with their seeds and fertilizers suppliers. However,they shall stop complaining, by chosing Bayer-Monsanto, they might be able to obtain a free pack of aspirin together with the painful terms and conditions set up. Great right!

If I may give an advise to Mr Grant, not sure producing MORE is the key for the years to come. Producing with guaranteed quality at the end might pleased french agri producers (and some others around the world). If they can also produce and guarantee wheat with ZERO ERGOT, they’ll be the king of Egypt ! Gasc (Egyptian government office for Agri prods importation) placed a tender this week, with the appliance of ZERO ERGOT policy and with no surprise, they got zero offer.  This is probably the best way to remain on the safe side with the ergot importation. Seriously spoken, a ship loaded with 63000mt was refused by Gasc couple of weeks ago, claiming the wheat about to be delivered was having a too high percentage of Ergot. It’s going to cost bit of money to all players involved in this mess.

On the chartering, definitely a week which we can forget and put behind us. Quiet, does not mean that nothing is happening, we got the information that a 45’000 10pct stem of rapeseeds was discussed ex Klaipeda to Ghent with 6000/8000shex on a supra in the 10/11usdpmt region. Same kind of size ex Black Sea (Kavkaz, which is a rather cheap port) we understood a 49kdwat got covered to load about 42000mt of bulk wheat with 8000sshex to Mombasa with 5000shinc there, done in the region of 19/20usdpmt. TC Equivalent on this one being something around 9000usd dely canakkale if my maths are not wrong. Still dely Canakkale with grains via black Sea to Japan Singapore range, quite few charterers being after this trade,, value for a Supra on this route is in the 9’000usd daily. From Wmed to Wafr a 55kdwt was discussed in the 8/8.5kusd per day. As a comparison, mv ‘elena Topic’ 45kdwat is said being covered dely span med redel Wafr at 8500USd daily. On the handies from Brazil to Continent, modern 38000dwt can hope to get bit more than 6’000 usd daily.

What’s going on on the index ? the bunkers ?

Today’s bdi is back at 800 with Capers gaining close to 200pts, others size are flattish not to say lackadaisical.

on the bunkers, Brent is moving up slighlty getting above 46usd/barrel

To conclude this today/week comments, I’m inviting you to read this article about Uber and wondering if losing $1.2billon on the first half of 2016 is a something normal?billion dollar baby .

Before reading it, you can wonder what’s the links with shipping ?

Well I can see at least 3 :

  1. While bankers and founds are focused on keeping investements going on in companies like UBER (if they stop, they lose everything), they have less cash available to finance new buildings. Guys, keep up focusing on Uber, thanks.
  2. We can hear pretty often that the world economy is getting « uberized » and of course, shipping industry is wondering how this uberisation can impact our business models. It’s looking like, at least today, it might be wise to wait a bit before brushing aside all the corporations and networks which are in place in the shipping environment.
  3. Being market leader does not prevent to fall (too big too fall), but we did not need to read this article attached to be aware of that.

Looking forward for the next week with full of cargoes and ships to be put all together, let’s do it the old fashion way, via your preferred broker. Pelagos team will be in time at the office, if needed they’ll order a uber driver.

Jerome

 

 

 

tough time, time to be creative

Good day, good morning,
Quite a limited access to market information today, as in our constant willingness to improve our service our IT system is being redefined and upgraded. Maybe nicer and quicker computers will help me fixing while I’m at the beach. Bit like the Automous ship, by 2035 fixtures will get done electronically only… With all the pros and the cons which are linked to this. (The pros being me at the beach).
Anyway discussing over the phone with various counter parties it seems it is quiet in most of European desks. Owners, charterers and consequently brokers. It’s looking like, on the grains sector, stems are in the pipe but still not ready to be developped on the market. Reading BMTI attached, annoncing “500’000mt of grains being bought by the algerians” (depending on the source, a figure of 700’000mt is also whispered) could lead all owners able to play on this specific trade to ballast to the likely area
of loading. Based on the previous years, it’s an open secret, continent shall be the next hot spot! BUT view the new wheat crop being very different from the previous ones, quite difficult to predict whether the origin will be from Blsea and continent (as mentionned by BMTI) or if traders will be able to source the commodity (and build up a competitive price) from Baltic or USG or ECSA… Australia? quite unlikely we have to
admit. Anyway, this kind of info dropped by BMTI “Algeria has bought 500’000mt which is said to have been supplied from the blsea and the Continent” is somehow a wrong statement as it’s not been supplied YET and could lead all owners to believe worth to move to Blsea and Continent to go out for the bread. As it is often happening in this tough time, sheepowners all going into the same direction and finally the supply of
ships is again exceeding the demand. Look what happened in USG in the last couple of months. It was said to be “the place to be”. As a result, in USG:                                                                                                                       on 14th sept    on 14th july
HS4 USGulf to Skaw-Passero 28000     6035 (-1)        7957 (-157)
S4A USGulf to Skaw-Passero 52454     9522 (-300)     10934 (-347)
P1A_03 Skaw-Gib atl round  74000     4475 (-66)       7659 (+236)

In addition, as mentionned by BMTI, and we can confirm, “many prompt
supras and handies vessels are in the area“.

On a larger Shipping scope, I was writing yesterday “”whilst the managers
keep going, more ships keep disappearing”. […] Ships are not  disappearing from the sea. They just change hands but theses ships will  keep trading at sea.“… Look at what Hanjin’s trying to do today (source Reuters), they try to sell ships on second hand market, 2 (at least) being on the market Mv ‘Hanjin Mar’ and mv ‘Hanjin Marine’ for (Hanjin’s hope) $40m, Reuters adding “The Company will still need hundreds of Millions of
dollars more if it is to survive”. The point here is again to say, Companies might go bust, but ships remain afloat… and let’s be thankful cargoes will still need to be moved from port A to port B. With the changing and challenging period in which we are it might go from port C to  port D, it’s time to be creative!

Should you wish to try to have some sort of backing on your creativity,  please do not hesitate to ask us our point of view and how -according to  our knowledge and expertise in chartering and shipping- your bright ideas  shall become concretes.

market at a stop?

History is just a matter of scale. We can therefore say, today’s BMTI report is historical and the introducing text is perfect “For the first time of this month, Capesizes show some signs of calming…” In other words, the Capers rally lasted for about 12 days.

Good news for owners on the short term, Oil is said to be on the decline and the barrel for October deliveries is heading below 45usd. on a longer term basis, you can read here some forecast and analysis about the oil market.rip peak oil. What’s not exciting neither is the general dropping prices for the commodities. I could read that industrial metals are getting hit particularly hard, with nickel dropping as much as 4.1% and iron ore in China slumping to the lowest level since June. Being on the chartering side, we can wonder if the prices are down because of too much production, in which case, buyers will still need to ship the goods or if the prices are down because of a lack of demand, in which case, as a domino effect, it means no cargoes to fuel in ships activities.  A quick look on the containers market review. Rolls Royce is working on autonomous ships for 2035… This is what we can call thinking forward. Unless in between the 3d printing machines have replaced fully the usefullness of the good transportation, expected savings for lucky owners are expected to be around 22%. One of the main reason, no deck house anymore, and no more needs for fuel to make the water boiling for crew showers. Right now, however are operated the ships, it is estimated that capacity of containers transportation is exceeding by about 30% the demand. This is not said if this 30% excess capacity is calculated before or after the opening of the new locks of the Panama Canal.

As a result of, some are not afraid to put the below question on the table:  Hanjin: the Lehman Brothers of the shipping sector?… You can find a try for an answer here hanjin & l&b… are they same?… And in the same vein, Bmti comments about the rumors and talks heard at the Antwerp Shipping dinner held last week. “Bankruptcy” could be the word of the year in our sector. If not 2016 maybe 2017. I just tend to disagree with BMTI when they state “whilst the managers keep going, more ships keep disappearing“. For me, it’s everything but not the reality. Yes top managers who very smartly drove the company to the wall will find another job and will focus on getting an indecent payroll on monthly basis without indexing same to the results of the Company. Meantime, Ships are not disappearing from the sea. They just change hands but theses ships will keep trading at sea.

Anyway, on the handy chartering side, things are moving very slowly, all atlantic routes are down, only Asia and FEAST routes are managing to go up, with +122 (today’s index) on the HS5. Why is it so slow? As we are still seeing cargoes on our left screen and ships on the right one, I think resistance is coming from owners. They’re not on strike but I got the feeling they are willing to resist to charterers usual willingness to keep the ball at floor level. Also, with quite a lot of Muslim countries being off today/tomorrow for Haj Pilgrimage and feast of sacrifice, China being off on Thursday, Friday, Saturday, my little finger makes me believe, this week will be and will remain a quiet one. If you don’t wish to believe my little finger, you can still go through this Platts market analysis.platts drymarket analysis. “handies, for Q4, is the most resilient market BUT… I don’t think it would see too much of a spike…” I’m bit more cautious with this analysis “if market players find the right ship/cargo at the right time then money will be good” (9’17”)… a bit like saying “well if tomorrow the temperature outside is warm, it might be a hot day”…. And if I fix today, there will be one ship gone off the market, and so a cargo. That’s my contribution to the market. You’re welcome.

 

 

bull on the wall?

An easy way to summarize today would be to say “as a usual Monday, it’s a slow Monday”. It’s been the truth… So what shall I add to that? Well, on the grains world, it is very likely that usual trades we have been seeing in the last years will move and be different. Australian wheat producers are fairly concerned about the Russian crop and impact likely to come on Australian grains exportations. Some more information here australian exports concern . It’s about the same everywhere. Look at the grains movements in Continent or Baltic. Same in USA, I always refrain myself to talk about politic in this report, however I was reading an interesting article earlier this afternoon, which I’m happy to share with you. I have to admit, the picture opening the article was fairly good in catching my eyes and have to recon, it seems NYTimes being not a big fan of Trump and his approach. cow-boy and agriculture for sure, it could be rock’n’roll in the month to come.

Also, I could read that Algerian wheat tender for October / November is for 700’000mt see here  and very difficult for owners to anticipate the right position for their ships, as the origin might come from almost everywhere…

<blockquote class=”twitter-tweet” data-lang=”fr”><p lang=”en” dir=”ltr”>Algeria's final wheat purchase at 700,000 T – traders – RTRS</p>&mdash; Ags Players (@AgsPlayers) <a href=”https://twitter.com/AgsPlayers/status/775362804740034560″>12 septembre 2016</a></blockquote>
//platform.twitter.com/widgets.js

bye for now…

 

Gold medal of the best loser today is going to HS3 route… Well done

I’m trying to figure out if this is the market which is today slow or just my brain, which is trying to recover from the Belgium beer enjoyed yesterday in Antwerp for the “Antwerp Chartering Club”.

As we are not dealing (yet) into the Capers, it can only be the market being quiet.

Focusing on the Capers then, with Trans-Atlantic round voyages being currently about twice higher than it was 7 days ago, Continental front hauls at US$ 16’000. Up and down, are we allowed to call these movements “volatitily”? shall we be happy about this volatility, which is a signal for some dynamics?

All the smaller sizes are much quieter and let’s say the word quite worrying. Focusing on the Handies, you’ll have notice the concept of Front/Back haul (if same can be applied to this size), alternatively, we can call it “repositionning business” is about to disappear (Likewise the concept of moving from one basin to the other, to go out for money). Today almost wherever you are open with your ship and almost wherever you end up to, the daily value is remaining relatively flat (and realistically crap).

To ascertain this, let’s take today’s index, the gap between the cheaper route (namely HS3 Rio de Janeiro-Recalada trip to Skaw-Passero @5’431) and the most expensive one (namely HS6 South Korea-Japan trip via North Pacific to Singapore-Japan @6625 +7). This is only showing a gap of 1’194 usd daily.

Willing to claim there is some seasonality which enable to explain these?

Nope, sorry we can’t. Let’s have a look at the same BHSI report dated 1 year ago.

Who want to bet? Which route was the best for money?

I won, sorry, it’s the HS3, which were showing 12’427usd / day. The worst one was HS5 South East Asia trip via Australia to Spore-Japan was at 4’618 and for sake of comparison, HS6 was @ 5446. The delta was worth 7’809usd/day.

Back on this HS3 route, YoY, this route managed to lose more than 50% in one year, and managed to lose close to  25% of its value in the last 2 months.

The above statements are confirmed by Yesterday’s fixtures in the Bdi, one 28kdwat spot gone a 6.6kusd daily from ECSA to Skaw Pass, a 38kdwat dely continent redel Brazil done a 6.2kusd.

What’s wrong with handies ex ECSA? Nothing to export anymore? not even few Olympic medals left? shall we rename ECSA as follow LNWAFR (standing for Little New West Africa)?

To keep trying to make some analysis, BMTI pointing out in their “Handy bulk viewpoint” section “With the last quarter of this year approaching the market direction remains uncertain. Present conditions are very disappointing”. Change few letters in the “DISAPPOINTING” word and you get the word “DEPRESSING”. Excuse me but I won’t try to make some forecasts, I let the big experts doing it.

On the Chartering side, few fixtures reported shall interest most of the readers, based on Universal Baltimore and Hermann s fixture we can tell supras daily value for the scrap ex North continent to Emed is worth on average 8’750. Same size, via baltic with grains to WMED is hitting touch above 9Kusd daily.

On the bunkers, oil prices is showing some upward signals but nothing drastic.

Wishing you a great week-end and of course if you wish to fix during this week-end, don’t be shy, call my colleagues.