Thursday,Feb24, 2011
The dry bulk market lost further ground yesterday, as the industry’s benchmark, the Baltic Dry Index was rapidly falling, ending the session down by 2.03% to 1,253 points. As has been the established trend so far this week, the bigger ships have been taking the biggest toll, with Capesizes losing 3.24 percent on the day to just 1,345 points (Baltic Capesize Index), with daily rates still below break-even point, while the Panamaxes have also seen thin demand, with the Baltic Panamax Index retreating yesterday by 3.86% to 1,845 points, which is still way above the capesize segment, in yet another odd signs of the current times. On the positive side, Supramax owners have been enjoying the current robust demand for their carriers, with their rates up by 1.91% on the day.
Commenting on the Capesize market, Fearnley’s latest weekly report said yesterday that although there was a little more activity last week, this has slowed down and rates have fallen slightly. This combined with increased bunker prices result in even lower returns for owners. Despite an increasing number of vessels not trading the oversupply is still the major problem, and with new cyclones hitting major loading ports in East Australia the market becomes even more frustrated. Presently owners are willing to fix out their tonnage at usd 16000 per day for 12-month period, which is a considerable premium over the spot market, but these are new record low levels for this kind of fixture.
On the Panamax front it mentioned that “the positive trend from last week gradually faded out, lead by lack of fresh USG/ECSA grain requirements in the Atlantic, a sliding forward curve followed by a falling period market in the Pacific. Despite prompt vessels under pressure still some healthy numbers achieved in the Atlantic; typically 25000 + 500BB for Fronthaul and mid teens for transatlantic rounds. The Pacific saw rates coming off significantly to lower teens for Nopac rounds and a growing spread between spot- and period rates.
Charterers and operators are holding back and reducing their activity. Takers for longer periods clearly stand off as the forward curve test very low teens and most Owners still hope for a recovery to do high teens for same. On a positive note there is growing local enthusiasm with the commencement of the Nordic World ski championships in Oslo” said the shipbroker.
Meanwhile, the container market has yet to “recover” on the news of Maersk’s huge newbuilding order for 10 firm plus 20 optional 18,000 TEU container vessels. AP Møller has been in talks with DSME regarding the 18,000 TEU design for quite some time, and now finally confirmed. According to AP Møller, these vessels will burn 35% less fuel per container compared to the more standard 13,000 TEU container vessels operating today. In another report on the newbuilding market, Clarksons said that with the holidays now firmly behind us we continue to see the yards reporting new business being concluded. “As previously discussed, container enquiries in particular look to be the leading factor in generating this momentum as dry and wet remains relatively stagnant. With the container story continuing to press forward - this is ultimately inhibiting the shipyards willing to push pricing on other sectors and attempt to bridge the bid offer spread, that continues to stifle the potential for further volume.
In the short term, we don't anticipate this dynamic to change - and yards will want to exploit the shipbuilding demand that exists outside of dry and wet - and try to extend their forward orderbook coverage and take the pressure off themselves to yield to what is a weaker demand story so far. In terms of reported business; In Dry, Hanjin Shipping have contracted a pair of 180,000dwt Capesize bulk carriers at Daehan, these are scheduled for delivery in 2012 and the reported price for these is USD58.5 Mill per vessel. In China meanwhile, it has been reported that Shanhaiguan have won an order from Greathorse Shipping Holdings for 4 option 4 x 76,000dwt panamax bulkers, with the firm vessels due to deliver in 2H 2012 and 1Q 2013. It is understood that these vessels may have been signed at the end of last year and are only fully coming to light now” said Clarksons.
Commenting on the Capesize market, Fearnley’s latest weekly report said yesterday that although there was a little more activity last week, this has slowed down and rates have fallen slightly. This combined with increased bunker prices result in even lower returns for owners. Despite an increasing number of vessels not trading the oversupply is still the major problem, and with new cyclones hitting major loading ports in East Australia the market becomes even more frustrated. Presently owners are willing to fix out their tonnage at usd 16000 per day for 12-month period, which is a considerable premium over the spot market, but these are new record low levels for this kind of fixture.
On the Panamax front it mentioned that “the positive trend from last week gradually faded out, lead by lack of fresh USG/ECSA grain requirements in the Atlantic, a sliding forward curve followed by a falling period market in the Pacific. Despite prompt vessels under pressure still some healthy numbers achieved in the Atlantic; typically 25000 + 500BB for Fronthaul and mid teens for transatlantic rounds. The Pacific saw rates coming off significantly to lower teens for Nopac rounds and a growing spread between spot- and period rates.
Charterers and operators are holding back and reducing their activity. Takers for longer periods clearly stand off as the forward curve test very low teens and most Owners still hope for a recovery to do high teens for same. On a positive note there is growing local enthusiasm with the commencement of the Nordic World ski championships in Oslo” said the shipbroker.
Meanwhile, the container market has yet to “recover” on the news of Maersk’s huge newbuilding order for 10 firm plus 20 optional 18,000 TEU container vessels. AP Møller has been in talks with DSME regarding the 18,000 TEU design for quite some time, and now finally confirmed. According to AP Møller, these vessels will burn 35% less fuel per container compared to the more standard 13,000 TEU container vessels operating today. In another report on the newbuilding market, Clarksons said that with the holidays now firmly behind us we continue to see the yards reporting new business being concluded. “As previously discussed, container enquiries in particular look to be the leading factor in generating this momentum as dry and wet remains relatively stagnant. With the container story continuing to press forward - this is ultimately inhibiting the shipyards willing to push pricing on other sectors and attempt to bridge the bid offer spread, that continues to stifle the potential for further volume.
In the short term, we don't anticipate this dynamic to change - and yards will want to exploit the shipbuilding demand that exists outside of dry and wet - and try to extend their forward orderbook coverage and take the pressure off themselves to yield to what is a weaker demand story so far. In terms of reported business; In Dry, Hanjin Shipping have contracted a pair of 180,000dwt Capesize bulk carriers at Daehan, these are scheduled for delivery in 2012 and the reported price for these is USD58.5 Mill per vessel. In China meanwhile, it has been reported that Shanhaiguan have won an order from Greathorse Shipping Holdings for 4 option 4 x 76,000dwt panamax bulkers, with the firm vessels due to deliver in 2H 2012 and 1Q 2013. It is understood that these vessels may have been signed at the end of last year and are only fully coming to light now” said Clarksons.
Source: Nikos Roussanoglou, Hellenic Shipping
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