being bottom of the wave, what’s the swell period then?

Again, with most of our French charterers being off today, doing the bridge, I have to admit this is cutting a bit the info and picture on what we can see out of the market. On spot prompt basis ex Continent whether you’re looking for a a handy, a handymax or a supramax, it’s a difficult task as the ships available are only said to be available for the end of July. Sure some of them went to Baltic, some other to BLSEA and some others might remain hidden and their managers will wait for Monday to put them on the market. It’s a fair game, charterers not to disclose too early what they have in their books and owners not showing their next positions on the market (or bigger step cutting of their AIS). Knowing our chartering job is mainly about hidding and getting information it is somewhere  interesting to read article everywhere in shipping medias about the needs for more transparency. Obviously, transparency being one thing, chartering and commercial decisions another one, unless you have the politics getting into the game. See this relatively fresh European Commission press release on price transparency: http://europa.eu/rapid/press-release_IP-16-2446_en.htm. (Shall we ask Boris Jonhson what he thinks about this?)

On the handysize still no fixture to our knowledge has been done ex continent. From the Blsea on these ladies, passing Canakkale or dop is the standard now. We got the rumor that a handy index type was fixed above the 5kusd level passing canakkale via blsea redel Egypt. I’ll run the maths to get the voyage equivalent for your monday start. From Ecsa, sailing from SAFR on a 34kdwat owners seems able to obtain 7500usd aps south Brazil to perform a Baltic destination to be compared with the HS3 at 6789usd today.

on the bigger ladies, Supras and Panamaxes, the end of the week leaving owners in an optimistic mood with either charterers talking period on modern Umax for 12 months at $6’250 daily. On the panamax side, in the East we understood an owners on subs at $7’000 daily for a 3-5 months took the advantage of chrtrs being late to see elsewhere what market can brings.

On the shipyards, which we were mentionning bit earlier today, they are at the bottom of the wave and it is quite likely the swell period is going to be a looong one. BMTI reporting “Japanese shipyards continued in june with only 4 orders in the month -2 handymaxes, 2 panamaxes- compared to 98 units registered in the same month in 2015!

have a nice week-end and we remain available if you have something to fix! alternatively we remain available for all operations matters which will surely pop up during the week-end with the on-going cp’s we have.

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where are the fireworks today? France or Black sea? #shipping #drybulk

Bdi keeps his movement up, heading to 738pts (today’s bdi), same level last seen was on Oct 26th 2015 and when looking at the curves (see below) on the bdi it is allowed to think the bottom of the wave is behind us, the recovery still seems to be a slow and long path but it’s always more exciting to work in an environment heading up.

bdi picture.jpg

…Unless, still according to the above the SMX and Handy markets are both cyclal in terms of years (as we can read everywhere) and seasonal as the chart tend to confirm.

We have to admit, today’s bit quiet in our french office (and so in our overseas ones) as charterers surely preparing themselves for the tonight firworks. But back to what I was mentionning yesterday, with BLSEA being “RED HOT” (as said by BMTI today), it’s very likely that owners will pay much more attention to this area and if open Gib/Wmed likely to take advantage of the peaking market on their East hand.

As an example, a ship open continental spain, offering equivalent to USD 5’300 daily for a 40 days trip via baltic redely WMED but without getting reaction from charterers, same lady is proposed 6kusd daily dely Passero redel Tunisia via Blsea. Owners aiming to be part of the festivities will most probably not wait for the fireworks to be over and take the decision to go to Blsea. Still from the Eastern Europe to Span Med, a  37kdwat was on firm discussion in the mid USD6kish but understood the discussion has been dropped due to charterers looking for larger vsl. The ‘St Gregory lady’ proudly reported on 11th july by owners being done at $4.500 daily, (St Gregory 2010 built 32,688-dwt concluded at $4,500 aps Canakkale for a trip via the Black Sea redelivery western Mediterranean)  is now to be compared to today’s Bdi fixture reports

mv’ TS Alpha’ 2015 38’872 dwt dely Ilichevsk ppt trip via BlSea redel US Gulf-Caribs $6,000 mv’Ikan Landuk’ 2013 37’115 dwt dely Derince ppt trip via BlSea redel US Gulf $4,500

(Owners of St Gregory can either claim to be The trend setter or just blame the timing for not allowing him to claim a 6kusd daily fixture).

We don’t have details on the fixtures explaining the $1’500 difference daily on these two ladies,  (Ts Alpha might have to end up in Cuba?)  but again, not that long ago, on the 5th july precisely similar ship for similar trip was not getting anything above $2’900 daily, as a quick reminder it was reported Bright ocean III 37kdwt blt 2013 dely Canakkale redel USG done at usd 2,900 for 1st 50 days, balance at USD6’500 daily. Owners of this mv ‘Bright Ocean’ has to keep his nerves down, as if the market shift keep up the same way, his ship will be open again in the wrong area, ie in USG, where we can see on the index the momentum being lost, and we can also witness, a lack of spot prompt requirements from USG. Index on the HS4 is now heading below the $8000. (losing 157usd in 1 day). However it is very very very unlikely USG will get as low as the Blsea was until few days ago.

To conclude on the Blsea market, the coasters are still struggling to bite their share of the pie. Without getting too much into details, the small grains parcel seen are not enough to counter balance number of ships open there.

On the s&p part of our business, Greeks are still (and remain) main buyers for 2nd hand bulk carriers. Out of 15 ships reported being sold, 6 are ending in Greek expert’s hands. On one hand nothing surprising about the revival of the 2nd hand market, which is obviously linked to the chartering side being quite better now than 3 months ago on the other side, we can be surprised about the revival on the Panamaxes… Are they still worth it with the new locks in the panama canal?

Appart from that? We were reading an interesting judgement made out of a dispute between owners and charterers, which were in disagreement about the word “trip” in the charterer party which were linking them. see here what’s a trip?

Also this scary movement seen on the chartering market where principals are setting up system enabling them to work on the principle of a dutch auction, without the needs of getting brokers involved. This is obviously scary for brokers adding no value only!

“Much like owners, there are too many brokers chasing too few cargoes. From the brokers, we need a clear demonstration of where they add value,” Michael Gardiner* said” should you wish to read the full article: chartering without brokers, this is disruptive!
Today more than ever then, I hope this report is found useful and you end up to the conclusion that Pelagos is able to bring some added value to your past/current/next fixtures.

(* Michael Gardiner is NOT the famous Australian rules playerbut yes the miner Ferrexpo’s global freight manager it’s kind of obvious but better to be precise)

turning point on the handies? yes probably

After offering you a break with my prose – I have to admit I had pretty much nothing to say yesterday- now market is inspiring me bit more, hence here I am. On Monday I was asking “if we are at a turning point on the handysize?”, the previous week I was highlighting some surprising high figures in the BLSEA (tce at 7000usd), still on the handysize. And out of a sudden market reports we can read and also other brokers or BDI are now on the same track about Blsea. (The shortcut to declare that I’m a trend setter is probably too much and thanks god for keeping me away from becoming a so called expert) but surely doing the exercice on a daily (or so) basis to try to share my sentiments on the market is helping to get some feelings. For once it seems I was not that far.

Focusing on the HANDIES, Continent grain activity is fairly poor and owners open around aiming for grains shall consider keeping the ships going further north to grab the ex baltic requirements which are likely to come in the next weeks. and already in the air either from Mukran or Poland or Muuga to name few of them alternatively, if open Wmed/central med, considering a ballast towards BLSEA could be a decent idea. Russia and Ukranian new crop are quickly arriving in the silos and view the exports forecast from these countries, at some stage, the market will need ships to move the stems. Glencore seems to have beeng caught with a spot cargo  ex Romania to ARA at 12.6 usdpmt (w/ tce at about $7’000 daily according to experts!) shall give some confidence to owners open there… and as a butterfly effect, same shall bring some cold sweat to charterers having large books for the weeks to come ex this specific area. ((For your records and if willing to run your maths, the Glencore cargo is asf 35.000/10% Moloo Agriprod (sf 53’) ex Varna 6000x / Vourgas 6000x / Ctza 8000x / Ily 8000c to ARAG 8000x out Laycan 13-15/July 2,5addcom)  and as you can see it was a spot requirement, which we were still seeing on the market yesterday morning and Freshly proposed on Friday 8th mid afternoon). Again, One fixture shall not do the market, Glencore hitted the market with a spot requirement, however to my opinion, charterers will need to find the right balance between getting on the market with forward dates and allowing then to  have enough time to get the competition meantime opening the books now could also give info to owners with more cargoes to come…  what’s Gasc doing?

I don’t know when these will have to be shipped and most probably it will make more sense on the larger ladies.

Ex ECSA, it is indeed fairly quiet, few sugar stem are seen on the market but according to what we are seeing by far too many ships around compare to requirements seen. Value for the HS3 is fairly likely to get below the 7000 in the days to come.

In Asia, the interest is also going up on this size and owners will probably ask for a higher premium to leave this area if your requirement is ending in Wafr.

On the industry side, Shipyards are also facing big hard time, see here

korean shipyard in destress?
or  not…

Imabaria is fine, thanks

have a nice day and we remain at your disposal

 

there is no little victory as french soccer team says

Last time BDI was above 700pts on nov 1st 2015 which was at 706. Today index dated 8th july 2016, the bdi hits 703. As french soccer team would say, there is no little victories.

Capers showing a sign of cooling down and charterers are therefore deciding to apply on 2 of them a 20 years contract. A good news for the spot market, 2 ships less.

If we stick to what we can read in BMTI, not enough Supras open in Continent in July and this might lead to a shortage of vessel in this area for the weeks to come then lead to “substantially higher rates in the days to come”. Let’s see but it is also permit to believe all supras which will be open in the next 3 weeks in this area being not seen on the open market yet and with end of Ramadam in Northern Africa countries, might also lead to quicker completion of discharging operations, hence bit more than the 12 supras seen by the brokers. (I count 14 off them including Baltic).

About the blsea, BTMI’s still the Ravenna stem mentionned to you yesterday, after discussing here with Handy Blsea expert, he finds my estimate at USD 6’000 daily for end july quite generous and to him it’s more equivalent to 4500/4750usd pdpr. The difference is coming from the total duration estimated on the voyage and how many extra days at port you insert in your calculations. I was estimating 2 extra days when my expert believes it shall be 3 extra days. We can argue about the relevancy on this extra day (knowing total duration is about 15/16 days) however as said previously, this is highlighting the difficulties to run voyage estimate and Tce equivalent accurately. There is so little margin on the revenue, each single extra cost for owners ruinning the whole economics. Having said this still in Blsea, prompt lady are discussed in the low 10usdpmt to tunisia – which shall be in the 4’500 usd daily while according to information we got, owners asking $6000 daily to heads up to morocco… noticeably asking being different than getting. All in all maybe my yesterday tce at $6’000 for end july ends up to be the right one estimation.

This cargo is also seen here 25000 blk wheat 10% ex 1sp out of Constanza ,Novo , Kavkaz , Taman , Tuapse to 1port Libya out of Tripoli, Misurata or Al Khomos l/d 7000 shex/2250 ts fhex Laycan 12/15 july but no ideas disclosed yet. EX USG, to libya still,  20’000mts grains is worked at 35usdpmt which bss 1sp missriver with 6’000x at load and including some extra war risk premium shall give a tce in the 9’000usd daily. Worth to point out he HS4 US Gulf trip via US Gulf or north coast South America to Skaw-Pas sero 28000 is today at 8225 and losing 43pts vs the day before.

On  the finance bit of our industry you can either read the attached BMTI with an intersting summary of the MSI analysis. If you’re into the FFA, you can go here  http://www.seatrade-maritime.com/news/asia/dry-bulk-ffa-market-not-inspiring-a-lot-of-confidence.html

on the grains, French soft wheat harvest is 1% completed as of july 4th (source AGS PLAYERS), Place Vendôme French soft wheat harvest is 100% completed (source Jerome Sorrel), see picture here https://www.instagram.com/p/BHmt9NehrPa/?taken-by=jersorr

have a nice week-end and we remain at your disposal. should you have any comments on the above, don’t be shy and post it.

 

 

 

 

 

drybulk market is an enigma

Markets seems to start to realize which are the various impacts on the Brexit voted 2 weeks ago. Not talking only about the English Premier League impact about hiring players coming from European countries but the downturned seen earlier this week on the oil price is one of the “side effect” of this decision on the drybulk industry so far, and according to the BDI it has not impacted yet in a negative way. Will the seaborne industry be left aside, we can doubt. Let’s say the later the better.

We mentionned you in the previous reports few info in regards to the new grains crop, (see here previous articles wondering what to do with useless ship/and wasted wheat?  Reading again shall give owners and brokers some input on who will need some grains and from where it is likely to be shipped (or not)…

BLSEA countries are said to be the big grains players exporters. We got the rumor that a 25’000mt stem from Romania to Italy Adriatic was discussed under the 10usdpmt mark with fairly quick shinc terms all ends for loading end July. Basis our calculations, this is giving an equivalent for owners of an handy index type something like USD 6’000 daily bss dely Canakkale redel Passero. Are charterers betting for the BLSEA season picking up as it did last year at the same period and willing to be covered? Knowing these usd 6’000 are double of the levels currently obtained. Meantime, for the purpose of the exercice, exactly the same trade on which we apply USD 3250 daily with today’s bunkers is giving an equivalent on voyage at only 1.75usdpmt less… which is still USD43k less… the trader margin?!

On the CONTINENT side we tend to disagree with BMTI stating “the continent has been particularly quiet with handysize activity at very low level” but we agree with “the chartering market is a bit of an enigma, Many players holding back since nobody has got an idea for the market next moves”. Yes, we disagree with the “slow activity” in Continent we would say the challenge for all parties involved is to find the right timing. And we agree with the “holding back mood” as on all the commodities, players are in expecting mood awaiting for the nice European, English and Occidental politicians, to take the next step (or not) for the Brexit. Specifically on the grains, as already said, traders are awaiting to know the results of the first samples harvested to know where they’re going to source their stem.

In Today’s BDI we can read mv ‘master’ being covered dely Skaw redel SEASIA at $7500 daily if via Cape of Good Hope or $9’350 + ewri if via Suez. Quite likely owners having a strong preference to avoid Gulf of Aden. Handy dely gibraltar redel WMED via continent with grains according to what we heard or have seen or done was yesterday at 4’500usd daily.

ECSA handy activity seems to be slowing down and which ever the size, argentinian and Uruguayan ports are showing level of congestion with quite a strong difference, from touch and go up to 26 days waiting, average being 6 days waiting.

On the larger size, we are seeing fixtures reported from USG heading toward the 15’000 USD daily, wich eventhough the destination is WCCA is starting to give on a 1 run a quite good number for the owners. We heard that the missippi river was getting closed see here http://www.reuters.com/article/us-usa-shipping-mississippi-idUSKCN0ZM1P7 this could have an impact on the logistic and make the barges coming from the country side to the southern ports.

Have a nice evening and we’ll do our best to remain friends with the Germans, whatever the results of tonight.

wondering what to do with useless ship/and wasted wheat?

Please note Bdi is remaining up, meantime Capers are seeing a first decline since quite few days. The upward movement is still here but we can feel confidence being in decline. Handysize, ex continent/baltic after a starting of the week with quite various cargoes from Baltic (mainly scrap and steels) which drove up owners ideas, it appeared the stems were either not firm or not ready to be traded and after few subs being lost interest on the grains cargoes which are paying less but are firmer have been receiving a more positive echo yesterday and this morning from owners. Blsea remains a arsh area to be in with a ship with level being proposed on handy for Blsea to Morocco at $3’000 daily even below this 3kUSD if the final destination is USG which remains a nice area to trade from.

If like us, you try to understand somehow challenges which are faced by grain traders you realize that quality of the next crop is the center of grains charterers attention. Which origin will go where? And owners being Grains fans then to try to know where they shall try to be open next. Quantity will be here again, questionmark remains on the quality. On the wheat, Russian next harvest, seems to be poor in terms of protein (only 10/11%) when the average is shall be at 13%. As the new crop is arriving it’s time to set some assessment with the one which is just over. It’s quite surprising to read that Blsea nations becoming top Grains exporters with 80Millions Metric tons on the season 2015/2016, when USA is at 75Millions BLSEA GRAINS EXPORT article here.

Of course grains is not everything in the drybulk shipping industry but we can wonder how the traders and charterers from this Blsea area managed to keep the shipping blsea market so low for the whole year or in other words where would have been the blsea market if the grains export would have been lower?

Canadian corn production regions are facing one of his worth drought since decades. French wheat, still need to see what the outcome, anyway french people are not so worried, they have found new way to trade this cereal, see the posh place Vendôme covered by wheat here: so chic

Yesterday, Oil has dropped by 5 % (source reuters) “Brent crude was down $2.44, or nearly 4.9 percent, at $47.66 a barrel by 1:09 p.m. EDT (1709 GMT). U.S. crude fell $2.55, or 5.2 percent, to $46.44. That was the biggest one-day percentage drop for U.S. crude since Feb. 9, Reuters data showed.” full article here. oil prices drop

On the Owners’ side, if owners are wondering how to keep their ship busy, here they are about to find new trading opportunities. fresh salmon here and surely thinking a bit more ahead, people will find new use for nice ships.

I can’t wait to eat Norwegian farmed salmon breed in brand new ship and fed with Place Vendôme’s wheat. Waiting for such as always, being a broker, I’m pleased to try to fix your very useful ship with tip top wheat quality.

 

Trip to Panama. Questions about the new canal dimensions

 

As we can see in yesterday’s BDI Fixture list ‘Genco Raptor’ (76.5kdwat blt 07) fixed dely Gib via N France to Spore Japan at usd daily 10’500. This figure could give some guidance for this Glencore fixture which has been reported on the Commodity market, details which you can find here, and this being a noticeable effect on the trading market of the Brexit and weaker pound. If one of you, reading this report happen to know the freight or daily hire done by Glencore I would be very interested to get the info. Glencore, still is seen on the market with a 15 to 25kmts barley from France to Morocco

Talking again about this Onne to brazil, (see yesterday’s report) market reports is evaluating the TCE @ US$ 1’500 daily for 30 days employment. This seems to me quite sharp I was estimating it at 2’250/2’500 usdpdpr, while owners open there was estimating this cargo at 10usdpmt being equivalent to about USD 3’000 daily. At the end, we can run the figures in every ways, for sure the money proposed by charterers is low and I repeat, I think it’s too low to be realistic eventhough ECSA is looking like a promising destination for the taker.

Still in market report I could read that Star bulk Corp. is editing his financial results, “reporting the worst net loss in 30 years US$ 48.8Million.”… 30 years this is sending us back to the mid 80’s shipping crisis which some of you reading this report probably had the chance to go through as a trainee!

Before you go on week-end or you can still read it while watching the soccer games (especially if the game is as boring as the one yesterday Portgal Vs. Poland), I’m proposing you a quick trip to Panama.

Panama has been the center of the world lately, in the financial world with the Panama leaks, which allow me to say has been big and then Pscchiit, pretty much nothing came out (can wonder about the Brexit also but it’s another story).

Panama canal expansion, and this is bit more interesting in a chartering point of view. Surely most of you did not really pay attention to the details of the new panama locks and new dimensions. Mainly because Panamax / Capers and VLGCs are not your daily bread but now almost a week have been passed since the 1st ship went through these new installation, let’s say it’s time to put some thoughts behind this.

Panamax – What’s a panamax nowaday?

as per Baltic Dry Index a Panamax is

  • 74’000mt dwt
  • loa max 225m
  • beam up to 32.3m
  • draft being at 13.95m

 

and as per new Panama locks, it is now

  • loa max 366m
  • beam up to 49m
  • draft 15.20m

 

Looking like a Caper no? Still according to BDI, a Caper is

  • 289m Loa max
  • Beam 45m
  • draft 17.75m (so can go through Panama canal by cutting size only)

So according to BDI a capers is becoming a Panamax. And what’s a Panamax becoming then a Supra?

Before the new locks being open, 55% of the fleet at sea could not go through this Canal. Today, 79% of the dwt tonnage in the world fleet will now be able to go from Pacific Ocean to Atlantic Ocean running in less than 78km (abt 42 miles). We also understood most of the Panama canal users are containerships (counting for 1/3 of the canal  transit and half of the tolls paid). Focusing on the drybulk sector, about 55% of the fleet could go through the old Panama Canal when now it’s close to 90%!

Talking about money, soon going through the new locks, the big mamma’s will have to pay usd 1Million to cover the toll. The first ship, so called Cosco Shipping Panama paid USD 575k (Owners may have obtained a rebate for being the 1st one!), MOL Benefactor a 10’000teu ship is about to pay USD 830K. Panama canal able to welcome 12,000 teu ships. Surely Panamian authority will welcome quite few of these ladies to recover the USD 5.25bn invested in this (5250passages of 12’000 teu to be precise)

All in all, this is raising quite lots of question marks on how the market will adapt to this new parameter.

  • How will this impact the chartering activity? (For sure in an over tonnaged capacity market it is not a good thing to have ships able to perform voyages at quicker pace than they used to. It means ships will be open again on a quicker basis, looking for cargoes more often and we can wonder (but we need to ask to experts)
  •  which total dwt capacity is this new panama canal capacity  equal too?
  • How many more rotations/ year will the additional 35% of the drybulk fleet will this represent?
  • How shall BDI (working with SGX) define his new indexes ?
  • his new routes?
  • How shall we call a panamax now?

To this last question, some funny people are suggesting Alangmax. If you are wondering what’s this mean, then please read this: alangmax, what’s that?

For sure if we stick to the index, the shipping market seems to be very happy with this new set up, since last Friday BDI went up by 50 points, BPI by 77.

Have a nice week-end and remember we at Pelagos can work shinc wheather permitting only.