archonmaritime2 arcadia gac17
globalseaways17 

ΝΑΥΤΙΛΙΑ

Εκτύπωση

Allied Shipbroking - Weekly Shipping

25 Ιουνίου 2020.

ships15Market Analysis

15th - 21th June 2020, Week 25

Shipping may well make claim of carrying 90% of world trade, yet its China that accounts for 30% of the world’s key commodity imports that really makes for a big driver of dry bulk freight rates. It takes up more that 60 percent of the iron ore and soyabean markets, while accounting for roughly 30% and 20% of the global trade in fertilizers and coal respectively. Its dominant position has been more than emphasized by the recent rally that was witnessed in key parts of the dry bulk freight market these past few weeks. With China having already eased back from its lockdown restrictions, traders have utilized the relatively soft commodity prices to snap up large volumes. The volumes have been considerable and have gone a long way in helping freight rates recover. Yet with economic activity in China still struggling to find a strong foothold, the situation could be more troublesome than one might think.

China released last week a series of major economic indicators for May, showing an improvement in investment, consumption and industrial output compared to what was being seen in April. Yet this improvement was still far less than most economists expected, while we are still seeing a fairly high level of urban unemployment rates. So,what’s been feeding this import frenzy? In part, a whole lot of this increased appetite from traders has been the accumulated demand lost during the first quarter of the year.

Another major driver has been the low prices seen across most commodity markets, with many traders finding this as an opportune moment to snap up stockpiles at relatively low levels. In cases such as that of Iron ore as well as other major dry bulk commodities, we have even seen an increased level of concern over any potential export disruptions that could be noted from the escalating pandemic conditions in Brazil and increasing trade tensions with Australia, leading many traders to increase their restocking while they can. The roll-out of fiscal stimulus measures has also helped the situation, driving up demand from the strong recovery noted last month in construction, though demand from manufacturing is still lagging behind. Beyond this however it is evident that China can’t go at it alone. Without the strong consumption driven demand from the West, China will struggle to return back soon to its near-term growth rates. At the same time, fiscal stimulus measures may well have the added benefit of usually driving strong demand for new infrastructure programs, though China’s commitment, although significant, has been a mere 10% of its GDP, a figure considerably less than the 20% committed by most OECD economies. A large portion of China’s economic growth is still export driven, though even the part that is driven by internal consumption is under threat with an increasing number of small business closures and sharp rise in unemployment weighing down heavily on the internal economy’s ability to re-boost itself back on track. Chinese consumer spending has posted an increase in May, though still lagging behind last year’s levels.

Over the next month or so the freight market may well re-energize back to fairly firm levels, helping owners recover some of the losses incurred during the first quarter of the year. The resurgence that has been noted in demand however is still looking to be temporary and fragile in nature. The still looming threat of a renewed lockdown in Autumn, coupled with a still sluggish paced recovery in the West and continued geopolitical issues, leave for a high-risk potential of a complete derailment of the recovery effort being made.

 

George Lazaridis

Head of Research & Valuations

 

 

Freight Market

Dry Bulkers-Spot Market

15th - 21th June 2020

 

Capesize – A very bullish week for the Capesize market, with the BCI 5TC climbing to above the US$ 25,000/day mark by the end of the week. At the same time, it was a huge breather, given the extremely negative track noted since the onset of this year. Hopefully, the good momentum that is currently being portrayed across all benchmark routes, will help boost overall sentiment in the near term. With the Atlantic basin experiencing a 175.7% growth and the current strong iron ore demand from the Far East, it is remains to be seen if this upward trajectory in freight rates will be sustained. Moreover, it will be a good indication as to which phase of a market rebalancing we are currently under.

Panamax – A strong week was also due for the Panamax/Kamsarmax size segment, which saw its TCA figure finish the week above the US$ 10,000/day mark. As was the case with the larger size segment, the main culprit behind this steep growth was the Atlantic market, which experienced an increase of 136.1%. With all main trades being on the positive side, hopefully, the overall market will continue to hold its upward momentum for the time being (at least).

Supramax – Things also remained on the positive side here as well, with the BSI— TCA growing by 10.2% as of the past week. Modest demand levels were the key driving factor here in keeping all of the main benchmark route figures at relatively positive gains for yet another week.

Handysize – Inline with all other main sub-segments, it was a week of gains for the Handysize market too. At this point, we are experiencing a rather vivid US Gulf market, with the other main trades following closely behind.

 

Freight Market

Tankers - Spot Market

15th - 21th June 2020

 

Crude Oil Carriers - The negative trend resumed last week in the crude oil tanker market space, with the BDTI posting a w-o-w loss of 7.6%. In the VL front, demand remained at subdued levels this past week with all trading routes losing ground. A limited number of cargoes moved from the USG and MEG, levels not enough to boost the market as a whole. In the Suezmax segment, activity remained anemic, a fact that led the average TCE to fall by almost 5% in a week. Fundamentals here however are still showing positive signs for the week ahead. For Aframaxes, hurt sentiment has played a key role this past week in the slide noted in freight rates. The only trade route with gains was that of NSEA-CONT.

Oil Products - On the DPP front, the overall trend in the market remained negative, with most of the main trades being under considerable pressure for some time now. A glimpse of optimism was only exhibited in the Caribs-USAC route, which succeeded a slight increase during the past week. On the CPP front, the bearish mode still holds across all main aspects of the market at this point.

 

Sale & Purchase

Newbuilding Orders

15th - 21th June 2020

 

It was another week of soft interest levels being noted for new newbuilding projects, as poor global economic outlook still overshadows buying interest. However, the recent impressive rally in freight earnings noted in the dry bulk market may eventually lead to a fresh series of enquiries coming to light, helped in part by the slight correction that has started to be noted in newbuilding prices. In the tanker market, freight earnings seemed to be tacking a completely opposite direction, with sharp corrections still being noted across most segments, dampening buyers’ interest though only slightly since earnings are still at considerably “good” levels. Despite the fact that market fundamentals have deteriorated slightly in recent weeks; they still hold for fairly positive conditions to be experienced in the long term. As such, this drop in newbuilding activity may well be temporary in nature and not anticipated to hold for long.

 

Sale & Purchase

Secondhand Sales

15th - 21th June 2020

 

On the dry bulk side, the relatively good momentum in the SnP market continued for yet another week, with both the activity being noted and buying appetite seemingly re-emerging at a fast pace. As of the past week, we experienced a good flow of transactions in the bigger size segments too (and for more modern units), helped (to some degree at least) by the strong upward trend noted in freight rates during the same time frame. All-in-all, with a far more bullish attitude currently being portrayed in terms of forward returns, we can expect things to ramp up further in the near-term.

On the tanker side, total activity noted seems to be on a softening path as of the past few weeks, given the relatively mediocre number of vessels changing hands. Whether this is circumstantial or a new trend remains to be seen. Notwithstanding this, given the recent positive spikes in freight earnings, we can expect a vivid sales market once more.

 

Sale & Purchase

Demolition Sales

15th - 21th June 2020

 

A complete reversal of market conditions has started to take shape in the ship recycling market, with interest amongst breakers starting to rebound considerably as of late, even though offered prices are still well below the levels we were seeing before the pandemic outbreak. The limited activity noted last week in Bangladesh seems to be just temporary, as a fresh series of enquiries, as well as actual transactions took place during the past few days. The effect from the annual budget determination being announced earlier in the month was received as a very strong positive sign in the market. Meanwhile, appetite from Pakistani breakers has returned firm to the market as well, after the reduction of income tax and customs duties for importing of ships. After a prolong period of inactivity, local breakers have started to compete heavily in the market, a fact that is expected to follow through in the coming weeks. In contrast to Bangladesh and Pakistan, things seem to have slacked in India, after a severe drop in local steel prices and the further deprecation of the Indian Rupee against the US dollar. As a result, most sellers of demolition candidates have shifted their interest towards the rest of the Indian Sub-Continent, where they can find much more attractive offers.

 

 

 

 

 

 

crossworldbanner

seanergybanerblue

antipollution

bv18

Ημερολόγιο

«  Αύγουστος 2020  »
ΔΤΤΠΠΣΚ
12
3456789
10111213141516
17181920212223
24252627282930
31

hellenicseaways20

bannerorion19

dnvglfoto1

Αναζήτηση