archonmaritime arcadia gac17
globalseaways17 

ΝΑΥΤΙΛΙΑ

Εκτύπωση

Allied Shipbroking - Weekly Shipping

19 Νοεμβρίου 2019.

ships79Market Analysis

11th-15th November 2019, Week 46

On Friday, the average of the year so far for the BDI closed at 1,346bp, almost perfectly attuned with what was noted during the whole of last year. Given also that the Capesize market has been showing a strong resistance to any downward so far, we may well see a modest yearly growth accumulate for the year (however, not as promising as the one that many aspired for one year back). Whether this growth will be enough to cover the total risk (as part of a risk-reward analysis) being faced right now through the excessive volatility the market has gone through remains to be seen.  Regardless of the technical analysis one uses, the major step back that has been noted in respect to the market stability and sentiment will most likely follow the dry bulk sector in the year ahead (at least). All the above have already been analyzed thoroughly in previous views, so, any further argument would be superfluous. The truth is that the market lacks direction at this specific point, with the exception maybe being the catch-up rally that was until recently the main "trend" being seen.

How do we quantify the market's confidence at this stage? Sometimes, the figures presented can create a deceptive view at any given point in time, especially when, other statistical indicators seem to be disconnected. Using the core Baltic indices for the different size segments, it is clearer that most of the dry bulk sector is in a much heftier downward spiral than what one would assume at first sight. For the time being however, it seems as though the Capesize market has many problems “swept under the carpet”. This is all while we are seeing a very different picture presented when looking at the rest of the dry bulk size segments. It is fair to point out that since the start of the final quarter the Capesize time charter average has dropped by a mere 13.8%, while during the same time frame we have seen the Panamax, Supramax and Handysize drop by and astounding 35.8%, 40.3% and 25.4% respectively. Someone can argue that this may be due to the time-lag in trends between that of the Capesize market and the rest of the different sub-markets (a relation that has been well noted in the past), or due to just different seasonal dynamics. No matter what the case however, this level of disconnection seems to be peculiar to say the least.

The true answer varies depending on how someone interprets things. A prevailing thought is that we have an amassed appetite (demand) that is holding Capesize rates "exceptionally" high, which simultaneously means that when this fades out, we will see the market easing back rapidly. All this could be due to current price levels for iron ore holding at prime levels to create an opportunistic buying spree, that should eventually subside. Or, we could be at the beginning of a de-correlation between different asset classes, following relatively different demand-supply trajectories.

All-in-all, are we in a resisting or a softening market? Maybe a little bit of both. I would stick to the last argument of the previous paragraph. Maybe, less correlation is a good thing at this point. In a market that is currently struggling to find a stable pace, filled with asymmetry in returns even in a tight time horizon, liquidity and solvency risks can be many. In other words, less positive correlation can actually mean that owners can undertake a more efficient diversification, that can smooth out potential cash flow imbalances (to some degree at least). Don't forget that in the current environment, excess returns can be subject more so to non-shipping dynamics which by their nature are hard to foresee in advance.

 

Thomas Chasapis

Research Analyst

 

 

Freight Market

Dry Bulkers-Spot Market

11th-15th November 2019

 

Capesize – The market seems to have eventually found a bottom, reversing the downward trend of the last few weeks. The BCI climbed this past week to 2,635bp, approximately 8% higher on a w-o-w basis. The boost was sourced from the increased interest noted from charterers for cargo movement from Brazil and Australia. However, the route from Australia to China slowed down during the last few days, without though this being enough to halt the upward momentum in the freight market that had picked up pace early on in the week.

Panamax – In contrast to the Capesize market, the downward correction continued to be present here. This past week, the decline noted in the BPI was around 13%, with the closing figure reaching 1,118bp. On the positive side, the Atlantic market looks likely to have reached a temporary floor, as some fresh enquiries gave a slight boost in market sentiment. The uncertainty though that prevailed in the Pacific dominated the market this past week, pushing the whole market down.

Supramax – The downward spiral continued for another week here as well, with the BSI dropping to 735bp, 11% lower than the previous week. The lack of fresh interest and the limited information available in the market, led several tonnage to remain unfixed and thus pushing freight rates even lower.

Handysize – Very limited activity noted this past week in the Atlantic, while long tonnage lists were present in key areas of the Pacific basin. The sentiment in the market has deteriorated as of late, as the market has shown a lack of positive sings for some weeks now. The BHSI fell last week by another 6%, closing at 509bp.

 

Freight Market

Tankers - Spot Market

11th-15th November 2019

 

Crude Oil Carriers – A fairly active week was noted in the crude oil space this past week putting an end to the recent declining pattern. In the VL market, fresh interest from charterers boosted the market, but gains were curbed due to long tonnage lists that were still being seen in key regions such as the MEG. In the Suezmax front, things were even more positive, with fresh enquiries and much improved activity giving a significant boost. On the Aframax front, freight picked up here too, due to a substantial increase being seen in charterers’ interest, with almost all the main routes showing a sharp rise in reported rates.

Oil Products – On the DPP front, the increased fixing noted last week led to a significant shortening of open tonnage in both Med/Black Sea and Baltic markets. As a result freight rates moved upward, improving further the market sentiment. On the CPP market, it was a very active week for MEG, pushing rates in the region up, at the same time that fixing remained relatively subdued in UKC, with the now shorter tonnage lists increasing hopes for a firmer market taking shape soon.

 

Sale & Purchase

Newbuilding Orders

11th-15th November 2019

 

Newbuilding activity was limited this past week, with interest from buyers starting to slow down now and looking poised to remain sluggish up until the end of the year. In the dry bulk market, we witnessed a couple of new contracts being reported last week, both from the same owner. The lack of interest seems to have come as a result of the recent downward spiral being seen in the freight market and the overall volatility that has been noted this year so far. These bearish factors have led most to be a bit more conservative in their decisions with regards to new orders. The total orderbook right now stands at 801 units, approximately 150 vessels less than the beginning of the year (15.7% YTD fall), compared to a 13.5% decline at the same time frame last year. On the tankers’ side, interest for new ordering has also declined. However, this does not mean that we did not see any new orders, as 4 VLCCs and 2 Suezmaxes were added to the global orderbook. The positive market outlook and the better state of orderbook compared to previous years leaves space for further activity to take shape over the following weeks.

 

Sale & Purchase

Secondhand Sales

11th-15th November 2019

 

The subdued activity resumed in the dry bulk market for another week, reflecting the increasing concerns regarding the recent freight market correction and the overall volatility being seen in the year so far. This past week we witnessed a limited number of second-hand units changing hands, with potential buyers taking a step back, awaiting to see if any clear bullish direction can take shape at this point. However, even if earnings start to rebound, it is unlikely that interest will resume in a snap fashion.

In contrast, we continue to see a considerable number of transactions taking place in the tanker market, with a dozen units reported as “sold” this past week. Once again focus was given to the products segment, with the positive outlook and the much-improved freight rates being the leading factors here. In the case that the freight market continues to improve, we expect to see a further escalation of deals to take shape over the following weeks.

 

Sale & Purchase

Demolition Sales

11th-15th November 2019

 

The ship recycling market resumed on a sluggish pace for yet another week, with very few units being sent to the breakers yards. However, some positive signs are starting to emerge, stretching hopes that an uptick in the market is now in sight. The most positive news came from Bangladesh this past week, as it seems that scrapyards are not keen on following BSBA’s attempts to shape a pricing cartel. As a result, interest from owners of vintage units has started to revive and slots have begun to fill up once again. The recent slump of steel plate prices played a key role in this decision from the domestic recyclers. However, with limited available slots in the domestic scrapyards and with the improvement in offered prices being fragile, things could turn negative once again. Given problems faced in Bangladesh these past few weeks, India has been able to attract some tonnage so far due to the gradually improving fundamentals in the local market. The significant drop though noted last week in the Indian Rupee and the comeback of the Bangladeshi market may drag down interest over the coming days. In Pakistan, things only got worse, with some of the local breakers starting to shut down due to lack of activity. Adding to this, there is little sign of a potential rebound in the market, making for any even more gloomy outlook for this specific market.

 

 

 

 

 

 

crossworldbanner

seanergybanerblue

antipollution

palau

bv18

panamanian19

rstechnical7

Ημερολόγιο

«  Δεκέμβριος 2019  »
ΔΤΤΠΠΣΚ
1
2345678
9101112131415
16171819202122
23242526272829
3031

wartsila

hswbanner19

hellaschartbanner

bannerorion19

depa19

Αναζήτηση

slideforum20