All details given in good faith but without guarantee Deep Sea Tankers +44 (0)20 7535 2626 Dry Cargo Chartering +44 (0)20 7535 2666 Container Chartering +44 (0)20 7535 2867 Weekly Chartering Report Braemar Seascope Thursday, 25 July 2013 Market Indicator Wet* 24-Jul-13 Jun Avg Avg YTD 2012 Avg TCE (US$/Day) TCE (US$/Day) TCE (US$/Day) TCE (US$/Day) 260,000 NHC AG/EAST TD3 2,000 7,000 -500 11,000 130,000 NHC WAFR/USAC TD5 10,500 1,500 5,000 12,000 80,000 NHC NSEA/CONT TD7 6,000 5,000 6,000 7,500 55,000 CLN AG/JAPAN TC5 1,500 5,500 8,000 8,500 37,000 CLN CONT/USAC TC2 12,500 8,000 13,500 10,000 38,000 CLN CARIB/USAC TC3 14,500 11,500 11,000 9,500 * All rates based on benchmark Baltic Exchange speed and consumption figures Dry 24-Jul-13 Jun Avg Avg YTD 2012 Avg BDI 1,117 941 881 920 BCI 1,936 1,637 1,471 1,573 BPI 1,145 865 951 963 BSI 914 907 843 904 Container 22-Jul-13 Jun Avg Avg YTD 2012 Avg B O X i 58.55 58.46 55.95 55.76 Financial 24-Jul-13 Jun Avg Avg YTD 2012 Avg BRENT CRUDE US$/bbl 108.30 103.12 107.86 111.81 IFO 380 ROTT US$/tonne 602.50 583.70 601.14 640.97 YEN/US$ 99.74 97.19 95.93 79.70 WON/US$ 1,114 1,137 1,108 1,123 US$/EURO 1.32 1.32 1.31 1.34
Transcript
All details given in good faith but without guarantee Deep Sea Tankers +44 (0)20 7535 2626 Dry Cargo Chartering +44 (0)20 7535 2666 Container Chartering +44 (0)20 7535 2867
W
ee
kly
Cha
rte
ring R
epo
rt
Braemar Seascope Thursday, 25 July 2013
Market Indicator Wet* 24-Jul-13 Jun Avg Avg YTD 2012 Avg
TCE ( US $ / Da y ) TCE ( US $ / Da y ) TCE ( US $ / Da y ) TCE ( US $ / Da y )
VLCC Last week, charterers abstained from entering the market with any great gusto, choosing instead to drip feed cargoes and try to erode owners’ confidence. With less than ten cargoes covered for the first decade, owners were still hopeful that charterers would have to enter the market with increased volume in order to cover the fixtures before the laycans become an issue. This week, charterers as expected have entered the market in much greater volume, with some 40 cargoes now covered up to and including the 10th August. The Chinese COAs certainly added to the tally of fixtures, but owners found it difficult to capitalise on the increase due to a large percentage of these cargoes being covered off market. With the cargo count becoming much more manageable from the charterers’ perspective and the availability of ships ever increasing at the Fujairah Anchorage, owners’ confidence began to diminish as charterers set about dropping rates. The available cargoes soon became a high commodity and offers followed in great numbers. Rates dropped to a low of ws34.5 for a trip down to South Africa but levels of around ws37.0 seem to be sustainable at present for trips to the East. West rates reflected soft sentiment and fell down to a ws22.5 via the Cape for a USG discharge. It has been a quiet week in West Africa, reflecting low volume for the month of August from the region. The second and third decades of August have been well short on cargoes when compared to the numbers from July. We will shortly be entering the window where charterers begin waiting for their stem nominations for September dates. Rates for W Africa/China are now being assessed at ws37.5 by charterers due to an ever expanding tonnage list. The eastern ballasters have always influenced the West African tonnage list in recent times. However, minimal activity seen on the Continent due to the arbitrage being closed is now forcing tonnage opening in Rotterdam to focus on West Africa for any realistic employment opportunities, putting further pressure on rates. The Caribbean has been steady and busy this week. The rate for Caribs/Singapore has been repeated multiple times at US$3.6m for Petrochina second decade stems and US$3.2m for WC India discharge on account of the Indian charterers. The rates have remained steady from the Caribs, however, with the downward trend now prevalent on a more general basis in the VLCC sector we could see rates out of the Caribs dip slightly in the coming week. From the Indian charterers this week, Hpcl came in the market off 28-29 dates yesterday and received up to nine offers. At the time of writing, charterers had not started countering. However, following the weakening sentiment in the East and a lack of activity in the West, charterers are expected to be in the driving seat for the business. IOC came in the market today off 25-26 dates and we expect to see a similar response in terms of tonnage offering for their requirement. We are assessing W Africa/WC India at US$3.2m and W Africa/EC India at US$3.5m. The 30 day availability index shows 65 VLCCs arriving at Fujairah, of which six are over 15 years old, compared to 41 last week. July produced a total of 131 reported fixtures. The total number of fixtures reported from the AG for the month of August is 47. The bunker price today is US$590.50/tonne, down US$9/tonne from last week. The freight rate for 280,000mt AG/USG is ws22.0, down ws5.0 points from last week. Owners' earnings are: Assuming one way (excludes any ballast) at 13knots laden, this equates to US$21,900/day (US$30,500/day last week) Round Trip Cape Laden (13knots)/Suez ballast (11knots) US$-3,500/day (US$900/day last week) The freight rate for 270,000mt Ras Tanura/Ulsan is ws36.0, down ws4.0 point from last week, so owners' earnings are: Round Trip at 11knots ballast and 13knots laden: US$13,100/day (US$18,500/day last week)
Route Size Load Discharge Today’s Assessment Last Week’s Average
TD1 280,000 Ras Tanura LOOP ws22.0 ws23.5
TD2 265,000 Ras Tanura Singapore ws37.0 ws38.5
TD3 265,000 Ras Tanura Chiba ws36.0 ws37.5
TD4 260,000 Bonny LOOP ws39.5 ws40.5
TD15 260,000 West Africa China ws37.5 ws39.0
China48%
USA12%
Korea-Japan20%
India11%
Spore/Indo9%
VLCC AG Weekly Spot Fixtures by VolumeIntended Discharge (18 - 24 July)
Long East51%
Short East26%
West23%
VLCC AG Monthly Spot Fixtures by VolumeFinal Destination (June 2013)
Cru
de C
hart
ering
Braemar Seascope Weekly Chartering Report 3
25/07/2013
The West Africa market maintained its positive form this week, kicking off with ws62.5 for UKC-Med and rising through to ws67.5 for Spain early on. This upward trend was reflected in the W Africa/S Africa rates, ordinarily about 7.5 points above the UKC-Med level, which spiked at ws77.5 for Durban midweek before falling off slightly. The rest of the West Africa market seemed to follow suit. With Charterers confident the market would fall off, owners both wanting to take advantage of the high market and fix away whilst stubbornly resisting downward pressure there was a small standoff, but one by one the cargoes were picked off. Ws65.0 seemed to establish itself for UKC-Med, but as the Brazil rate dropped from ws66.25 to ws65.0 in a day, the market looks relatively flat. As the quantity of cargoes working the market simultaneously has dwindled, so too has sentiment and it would be unsurprising to see it drop off going into next week for mid to late 2nd decade dates. Whilst the Mediterranean began promisingly with a ws67.5 for Spain and a ws65.0 for cross-Med fixed early in the week, activity slowed down somewhat from thereon in. What was interesting was the meeting of markets with Aframax levels closing in on Suezmaxes. This culminated in crossover, with an Aframax 80kt cargo fixing ws118.0 cross-Med on a Suezmax. Elsewhere, Black Sea rates were also looking a little more expensive, 140kt x ws66.0 fixing for UKC-Med early on in the week before 135kt x ws70.0 was achieved. The next Novorossiysk stem appears to be in the 10-15 window and the list does not look especially friendly for charterers. Certainly in the short terms, rates should stay stable, but the list looks a bit fuller in the medium term. Noticeably, the UKC market has also seen a squeezing of rates from adjacent market sizes, particularly evident on eastbound cargoes where a range of US$2.7m to US$3.5m from Aframax to VLCC sees Suezmaxes floating in the unknown between them. But in fact this week there has been little in the way of activity, with a ws49.0 for USG early in the week probably not too far away from where the market currently stands. Quite in contrast, the AG market has been teeming with fixtures. Rates began fairly healthily with 93kt x ws100.0 for Mumbai, a promising 138kt x ws75.0 for Sikka and 136kt x ws65.0 for Ningbo. But it was the westbound cargoes that really set the market alight. Whilst levels were similar to last done early on at 130kt x ws36.0 for USG, rates jumped around 20 points as tonnage tightened and a plethora of cargoes entered the market simultaneously. One charterer found itself forced into paying up to 130kt x ws55.0 for UKC-Med, and whilst a ws50.0 for UKC was fixed, it did little to stem momentum. Ws55.0 for UKC-Med was fixed a few times more, with cargoes to South Africa fixing between ws62.0 and ws69.0 also. The effect on those chartering to the Far East was minimal, rates sticking around 130kt x ws65.0, but for India bound cargoes they jumped, with 130kt ws68.5 for Chennai becoming ws75.0, 93kt x ws100.0 for Mumbai translating to 95kt x ws117.0. With VLCCs a cheaper option than Suezmaxes at these levels, the discharge and approval requirements played a role in driving this market upward. Levels should be soft once the cargo list shortens, but for the meantime owners will be happy to see such a jump in an otherwise depressing market of late.
Route Size Load Discharge Today’s Assessment Last Week’s Average
TD5 130,000 Bonny Philadelphia ws65.0 ws63.5
TD6 135,000 Novorossiysk Augusta ws67.5 ws61.0
135,000 Mediterranean UK Cont ws67.5 ws62.5
135,000 North Sea US Gulf ws50.0 ws50.0
135,000 Ras Tanura South East Asia ws67.5 ws65.0
AG34%
W Africa30%
Med/Red Sea10%
NW Europe1%
Black Sea7%
Carib/EC Mex10%
S America3%
USA5%
Suezmax Weekly Spot Fixtures by VolumeLoad Area (18 - 24 July)
Braemar Seascope Weekly Chartering Report 4
25/07/2013
Cru
de C
hart
ering
Aframax
The Mediterranean and Black Sea have been busy this week. The focus has been on rates, as the market sentiment has softened TD19 is now at ws80.0. With these levels firmly in place, we have seen a series of cargoes come into market at the end of the week. The Black Sea has followed and as delays in the Turkish straits remain below 24 hours, we expect the levels to match those of TD19. In the coming week, we expect sentiment to soften further as the Kirkuk terminal at Ceyhan reopens and tonnage is readily available. It has been a steady week for the Baltic and North Sea, with little fluctuation. A market cargo coming out early in the week led to a little tension but eventually was covered at Baltic/UKC-Med 80kt x ws65.0. Charterers are now covering first decade Baltic cargoes. The North Sea has been inactive, with rates holding steady at 80kt x ws85.0 cross-Continent. Looking into next week, there is potential for softening, however, not to any immoderate level as current available tonnage can easily capacitate enquiry flow and North Sea production levels are down for the month of August. Due to reduced tonnage and USG tankage delays, the Caribbean Aframax market has maintained its firming tendency that started two weeks ago and is settling at the 70kt x ws105.0 level. We believe this market has now hit its equilibrium as we see enough tonnage to satisfy cargo stems going forward. The Panamax market has also seen an unseasonal uptick due to delays with CBS/USG voyages fixing at the 50kt x ws135.0 level. Activity levels in the eastern hemisphere started fairly slow and gradually gained momentum towards mid-week, with more cargoes/tenders in the market. The AG has continued to be lively from last week with minimal changes in AG/East rates, hovering around the mid-ws90s level. More questions are being asked up till the second decade of August stems. A fair bit of action has been seen out of the Red Sea, with one eastbound unit reported on subs at ws107.5 and a few tender cargoes are also seen out of Bashayer around end August. The activity level out of the Far East has seemingly quietened down, with modest enquiries in the market and some vessels are also being caught by bad weather around south China region, resulting in delays. One replacement job is being carried out for Indo/up at ws82.5. TD14 has not seen much cause for any excitement, with rates hovering around low ws80s level and providing a TCE of about US$9,900/day.
NW Europe57%
Med/Red Sea34%
USA2%
Korea/Japan2%
SE Asia3%
Australia2%
Aframax (West of Suez) Weekly Spot FixturesIntended Discharge Area (18 - 24 July)
Baltic32%
Black Sea15%UKC
15%
Med13%
N Africa/E Med15%
Carib/EC Mex4%
W Africa6%
Aframax (West of Suez) Weekly Spot FixturesLoad Area (18 - 24 July)
Route Size Load Discharge Today’s Assessment Last Week’s Average
TD7 80,000 Sullom Voe Wilhelmshaven ws85.0 ws88.0
TD8 80,000 Mina Al Ahmadi Singapore ws95.0 ws95.5
TD9 70,000 Puerto La Cruz Corpus Christi ws105.0 ws104.0
TD14 80,000 Seria Sydney ws82.5 ws82.5
TD17 100,000 Primorsk Wilhelmshaven ws65.0 ws64.5
TD19 80,000 Ceyhan Lavera ws77.5 ws92.0
Braemar Seascope Weekly Chartering Report 5
25/07/2013
Cru
de T
anker
Su
mm
ary
-20,000
-10,000
0
10,000
20,000
30,000
40,000
50,000
Ja
n
Fe
b
Ma
r
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Se
p
Oc
t
No
v
Dec
US
$/D
ay
TD3 - 260 - Ras Tanura - Chiba TCE
2011
2012
2013
-10,000
0
10,000
20,000
30,000
40,000
Ja
n
Fe
b
Ma
r
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Se
p
Oc
t
No
v
Dec
US
$/D
ay
TD5 - 130 - Bonny - Philadelphia TCE
2011
2012
2013
0
10,000
20,000
30,000
40,000
50,000
Ja
n
Fe
b
Ma
r
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Se
p
Oc
t
No
v
Dec
US
$/D
ay
TD7 - 80 - Sullom Voe - Wilhelmshaven TCE
2011
2012
2013
-5,000
5,000
15,000
25,000
35,000
45,000
55,000
Ja
n
Fe
b
Ma
r
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Se
p
Oc
t
No
v
Dec
US
$/D
ay
TD9 - 70 Puerto La Cruz- Corpus Christi TCE
2011
2012
2013
Braemar Seascope Weekly Chartering Report 6
25/07/2013
Pro
jects
Time Charter
Hot in the city, hot in the city tonight. Sadly, the same cannot be said for the market with the safe delivery of Prince George Alexander Louis Windsor of Cambridge providing a welcome distraction in the West – a cracking newbuilding. Elsewhere, a VLCC was fixed to a sub-continent, export led refiner for 12m at US$18,000/day. There was an enquiry for eco unit Suezmaxes for 12-24m with owners talking US$17,500/day. On the LR1 and LR2 front, things have really wound down for the summer with rock bottom spot rates precluding any time charter activity. MR-wise, either side of US$14,000/day for 12m will do it depending on whether the vessel has IMO status or a pump room. One marineline coated, IMO2 unit was reported to have fixed at US$15,750/day for 2+1 years with both MRs and Handies seeing increased demand West of Suez.
1 yr 3 yr 5 yr
Handy 13,000 13,750 14,750
MR 14,250 15,000 15,750
LR1 15,000 15,500 17,000
Panamax 13,000 14,500 16,500
LR2 15,500 16,750 18,250
Aframax 11,000 13,500 16,750
Suezmax 15,000 18,000 22,500
VLCC 18,000 21,000 25,000
US$/day
Contact [email protected] London: Michael B. Friis / Mike Roberts / Vassilis Kolovos / Freddie Shepherd
0
10,000
20,000
30,000
40,000
50,000
60,000
Jan
-09
Ap
r-09
Jul-
09
Oct
-09
Jan
-10
Ap
r-10
Jul-
10
Oct
-10
Jan
-11
Ap
r-11
Jul-
11
Oct
-11
Jan
-12
Ap
r-12
Jul-
12
Oct
-12
Jan
-13
Ap
r-13
US$
/day
1 Year Time Charter RatesPast 5 Years
MR Aframax VLCC
0
5,000
10,000
15,000
20,000
25,000
30,000
Jun
-12
Jul-
12
Au
g-12
Sep-
12
Oct
-12
No
v-12
Dec
-12
Jan
-13
Feb
-13
Mar
-13
Ap
r-13
May
-13
Jun
-13
US$
/day
1 Year Time Charter RatesPast 12 Months
MR Aframax VLCC
Vessel Size Yard Build Period Rate (US$/day) Charterer
Bunga Kasturi VLCC Universal 2003 12m 18-19,000 Reliance
Aurora TBN MR Dalian 2004 2yrs 15,750 Reliance
Braemar Seascope Weekly Chartering Report 7
25/07/2013
It would be a huge understatement to say that it has been a dreadful week for MR owners in the AG. It really has been that bad. The tonnage list is never ending, and activity levels have been poor. 40 jet is on subjects AG/UKC at US$950,000, a rate so low it has never been seen before. There is also another ship on subs at US$995,000 which proves how poor things are in the sense that these numbers aren’t one-off fixtures. TC12 remains soft/flat with 35kt CPP fixing between ws93.0 and ws98.0, depending on the charterer and how much they wish to squeeze out of the owner. The end result is the same for the owner no matter what rate they fix; US$500/day or US$-100/day. At these levels, who cares?! AG and WC India/Gizan rates have slumped US$50,000 to US$550,000, and AG/E Africa cargoes are fixing 35kt x ws140.0 now. We've never seen the market this poor. Owners are swimming against a tidal wave and the tonnage list remains well stocked and shows no signs of reducing.
CP
P C
hart
ering
Clean Products - East
-5,000
5,000
15,000
25,000
35,000
Ja
n
Fe
b
Ma
r
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Se
p
Oc
t
No
v
Dec
US
$/D
ay
TC1 - 75 - Ras Tanura - Yokohama TCE
2011
2012
2013
-5,000
0
5,000
10,000
15,000
20,000
25,000
Ja
n
Fe
b
Ma
r
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Se
p
Oc
t
No
v
Dec
US
$/D
ay
TC5 - 55 - Ras Tanura - Yokohama TCE
2011
2012
2013
Route Size Load Discharge Today’s Assessment Last Week’s Average
TC1 75,000 Ras Tanura Yokohama ws70.0 ws71.0
TC5 55,000 Ras Tanura Yokohama ws80.0 ws79.5
TC4 30,000 Singapore Chiba ws105.0 ws106.5
TC12 35,000 WC India Japan ws95.5 ws96.5
Braemar Seascope Weekly Chartering Report 8
25/07/2013
CP
P C
hart
ering
Clean Products - West
0
10,000
20,000
30,000
Ja
n
Fe
b
Ma
r
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Se
p
Oc
t
No
v
Dec
US
$/D
ay
TC2 - 37 - Rotterdam - New York TCE
2011
2012
2013
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Ja
n
Fe
b
Ma
r
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Se
p
Oc
t
No
v
Dec
US
$/D
ay
TC3 - 38 - Aruba - New York TCE
2011
2012
2013
Route Size Load Discharge Today’s Assessment Last Week’s Average
TC2 37,000 Rotterdam New York ws140.0 ws139.0
TC3 38,000 Aruba New York ws145.0 ws147.0
TC6 30,000 Skikda Lavera ws165.0 ws162.0
Like the honest crab, the market well and truly moved sideways this week. The TC2 market has experienced just that, with rates UKC/trans-Atlantic holding around the ws137.5-140.0 basis 37kt. With enquiry still there and the tonnage list well balanced, it raises the question as how much more activity is necessary to really start pushing rates up. The differential gap for MRs fixing for West Africa and Brazil has closed slightly to 37kt x ws152.5-155.0. FFAs started the week on the softer note. However, as more enquiry entered the market over the week, buying for August, September and Q4 has increased, pushing the market up by three to four points. However, at close of business today it seems the market has peaked and selling interest has started to be seen. It has been an interesting week for LRs off the Continent with a number of fixtures, both east and west, being reported. Despite this, we have seen LR1 rates for UKC/trans-Atlantic and UKC/W Africa soften slightly to 60kt x ws105.0, the reason for which remains elusive as tonnage is balanced and enquiry isn't booming but by no means silent. LR2s have been active out of Ust Luga, sailing East with lumpsum rates being reported around US$2.95m. Flexies and Handies performing Baltic/UKC and cross-UKC voyages have remained steady at 22kt x ws180.0 and Handies around the 30kt x ws140.0 mark. Enquiry is slightly down at the end of this week, and any optimism has evaporated, with tonnage somewhat longer than owners would like. It remains to be seen what enquiries will appear next week; currently stems from the Baltic are fixing out to the 4-6 window. The Mediterranean is still enjoying a 'hot' summer, with enquiry still there and tonnage looking fairly tight. Rates are up by at least 2.5 points to 30kt x ws162.5, with ws165.0 being achieved for prompt cargoes. It seems that these rates could potentially hold as these levels are on subs out to the 10th August. With summer coming into full swing, rates may start to soften moving forward. The USG still remains active with a fairly tight tonnage list and healthy enquiry. Rates for USG/trans-Atlantic are pegged at 38kt x ws110.0, with reports that ws115.0 is now back on subs. Caribs/up has also softened, with rates hovering around the ws150.0 level.
25/07/2013
Dry
Carg
o C
ha
rtering
Braemar Seascope Weekly Chartering Report 9
The story of the week has been that of gentle decline. A week ago the four route average was $13,710/day, whilst today it stands at US$12,136/day. The West Australia/China route has continued to be active, and rates have been steady at/about US$7.70/tonne. However, the volume of enquiry ex-EC Australia, which thus far has yielded somewhat better T/C returns, has lessened, resulting in a decline in rate levels. Despite the support of continuing activity ex-Brazil to the Far East, which remained a welcome feature, trans-Atlantic enquiry has been lacklustre, and T/C levels have declined considerably since a week or so ago, when in excess of US$15,000/day was achieved. The news that the Drummond miners have commenced a strike will do nothing to assist sentiment in this basin. Reports of period fixing surfaced, with a suggestion that a well-described 180,000 vessel achieved US$15,250/day for close to three years, whilst a short period rate of US$13,750/day was reported to have been fixed on a vessel of 176,000 dwat. Given the time of year, though, it would not be excessively optimistic to suggest that the overall picture is of an encouraging level of activity which bodes well for the fourth quarter.
Capesize
0
2,000
4,000
6,000
8,000
10,000
-25,000
0
25,000
50,000
75,000
100,000
125,000
Jan
-09
Ap
r-09
Ju
l-0
9
Oc
t-0
9
Jan
-10
Ap
r-10
Ju
l-1
0
Oc
t-1
0
Jan
-11
Ap
r-11
Ju
l-1
1
Oc
t-1
1
Jan
-12
Ap
r-12
Ju
l-1
2
Oc
t-1
2
Jan
-13
Ap
r-13
Ju
l-1
3
BC
I
US
$/d
ay
The Baltic Capesize Index vs Atlantic & Pacific Earnings
Atlantic Pacific BCI
Dry
Carg
o C
ha
rtering
25/07/2013
The overall tone of the market has changed rapidly over the past few days, with both basins easing further from the previous week. Atlantic trading activity has slowed substantially and the list of available tonnage is starting to grow, adding to the growing concerns for the coming week. Despite the weakening near term outlook, North Atlantic ships have been extremely reluctant to cash in on the recent market gains and consider trips out to the Far East, with the main concern being the large volume of vessels that are expected to re-open in the Pacific following the prolonged congestion during the early part of the EC S America grain season. Trading conditions in the Pacific have been patchy again, and vessels open in North Asia continued to struggle in the absence of NoPac demand. A few early ballasters towards the USG managed to secure decent hire levels that equate to about US$9,000/day, which encouraged owners to rate upwards at the start of the week. However, it is becoming apparent that these were isolated cases and cheaper tonnage procurement option for the charterers at the time in the face of collective reluctance of North Atlantic ships to fix front haul rather than a fundamental increase in early September shipments.
Braemar Seascope Weekly Chartering Report 10
Panamax
0
1,000
2,000
3,000
4,000
5,000
6,000
0
10,000
20,000
30,000
40,000
50,000
60,000
Jan
-09
Ap
r-09
Ju
l-0
9
Oc
t-0
9
Jan
-10
Ap
r-10
Ju
l-1
0
Oc
t-1
0
Jan
-11
Ap
r-11
Ju
l-1
1
Oc
t-1
1
Jan
-12
Ap
r-12
Ju
l-1
2
Oc
t-1
2
Jan
-13
Ap
r-13
Ju
l-1
3
BP
I
US
$/d
ay
The Baltic Panamax Index vs Atlantic & Pacific Earnings
Atlantic Pacific BPI
Dry
Carg
o C
ha
rtering
25/07/2013
Braemar Seascope Weekly Chartering Report 11
The Continent Handy market has maintained some vitality this week after a sluggish end to last week. Rumours of vessels being taken for 3/5 months with redelivery in the Atlantic at levels around US$7,500-8,000/day add credence to this. Prompt Continent rounds are being rated by owners around the US$10,000-11,000/day mark, depending on spec and position, although the presence of several spot positions served to keep levels for charterers at workable levels. On the smaller sizes (15/25k Dwt), it was noted that for the first week of August, tonnage remained tight and as a result the numbers being exchanged were healthy (2/3 laden legs redelivery Atlantic at around US$7,000-7,500/day). Owners’ sentiment moving into next week remains positive, with hopes that the market will continue to firm or at the very least remain in a holding pattern.
Handy/Handymax/Supramax
0
1,000
2,000
3,000
4,000
5,000
0
10,000
20,000
30,000
40,000
50,000
Jan
-09
Ap
r-09
Ju
l-0
9
Oc
t-0
9
Jan
-10
Ap
r-10
Ju
l-1
0
Oc
t-1
0
Jan
-11
Ap
r-11
Ju
l-1
1
Oc
t-1
1
Jan
-12
Ap
r-12
Ju
l-1
2
Oc
t-1
2
Jan
-13
Ap
r-13
Ju
l-1
3
BS
I
US
$/d
ay
The Baltic Supramax Index vs Atlantic & Pacific Earnings
Atlantic Pacific BSI
Braemar Seascope Weekly Chartering Report 12
25/07/2013
Water shortages will curb China's appetite for coal Daliuta, Shaanxi province, sits on top of the world's biggest underground coal mine, which requires millions of litres of water a day for coal extraction, washing and processing. By 2020, the government plans to boost coal-fired power by twice the total generating capacity of India, but such targets will lift industrial demand for water in Inner Mongolia alone to 141% by as early as 2015 from 2010. Coal industries and power stations use as much as 17% of China's water, and almost all of the collieries are in the vast energy basin in the north that is also one of the country's driest regions. About half of China's rivers have dried up since 1990 and at least 80% of the nation's coal comes from regions where the UN says water supplies are either stressed or in absolute scarcity. Indonesia set to be No. 2 wheat importer Rising inflation is pushing Indonesia close to displacing Brazil as the world's No 2 importer of wheat. Increasing demand for cheaper wheat-based foods as a result of an effort to mitigate the rising living costs will support prices which have fallen 14% this year, with Australia set to benefit the most, as its premium and white wheat forming the bulk of Indonesian imports. Such factors could result in an increase in imports to 7.5m tonnes this year, a rise of nearly 1.5m tonnes on 2012, matching No.2 importer Brazil. China seeks Australian wheat as crop damage hits domestic supply Chinese importers are in the market to buy at least 500,000 tonnes of Australian wheat for January-March 2014, following extensive damage to domestic crops. China's wheat crop has suffered from frost in the growing period and rain during the harvest, and short-term import demand to could see the country eclipse Egypt as the world's top buyer. Attacks by pirates on ships in Asia down 11% in H1 2013 Attacks by pirates on ships in Asia dropped by close to 11% in 1H 2013 against the same period of 2012, with Indonesia being the Asian hotspot for incidents. There were 57 instances of piracy and armed robbery against ships in Asia reported in H1 2013, compared with 64 in H1 2012. Piracy in Indonesian waters accounted for 38 of the incidents recorded in H1 2013, the highest number for the region in the last five years. Last week, the International Maritime Bureau reported that violent and armed piracy incidents off the West African coast had surged during the first half of this year, while piracy attacks involving Somalis fell to the lowest level since 2006. Rebar trades near 3-month high as China pledges more railways Steel rebar futures traded near a three-month high after an announcement to accelerate the national railway construction in central and western provinces to spur growth. The country had planned to invest 520bn Yuan in railway construction this year. The government also approved tax breaks for small companies and reduced fees for exporters. The development fund is expected to spur large-scale rail projects, which will benefit demand for steel both from infrastructure building and real estate development along the railway. Australia's Port Hedland sets record for largest single iron ore shipment Port Hedland in Western Australia saw its largest-ever single shipment of iron ore set sail Wednesday. The PSU Eighth, a vessel containing 256,646 tonnes of iron ore loaded by FMG, left the port Wednesday night, breaking the previous record for the largest single ore shipment set in June. The previous vessel, the PSU Seventh carried 256,450 tonnes of iron ore. Iron ore exports from Port Hedland for the fiscal year ended June 30 totaled 280m tonnes, up 17% from the 239m tonnes exported in the previous fiscal year. Bulks declined (particularly coal) Weaker Chinese import data and rumours the PBOC issued a regulation over the weekend that commercial banks should suspend new loans to ten overcapacity (excluding key bulk demand) industries, including steel, cement and coal. Despite lower prices, it appears the strong arbitrage import activity in April and May was not apparent in June, with coking coal imports down 28% m-o-m and thermal coal imports down 20% m-o-m in June. This confirms the subdued market conditions for current coal demand and also indicates that domestic supplies and stockpiles are more than ample.
Asia
/ A
ustr
alia
Mark
et N
ew
s
Asia / Australia News
Conta
iner
Chart
ering
25/07/2013
Braemar Seascope Weekly Chartering Report 13
Containers
Vessel (TEU/HMG) Index + / -770/440 TEU (GL) 17.5 k 3.28 ► 0.00
1,043/660 TEU (GL) 18 k Eco 4.74 ► 0.00
1,100/715 TEU (G) 19 k 7.67 ► 0.00
1,700/1,125 TEU (G) 19.5 k 8.75 ► 0.00
1,740/1,300 TEU (G) 20.5 k 8.75 ► 0.00
1,714/1,250 TEU (G) 19 k Bkk Max 5.34 ► 0.00
2,500/1,900 (G) 22 k 4.41 ▼ 0.05
2,800/2,000 TEU (GL) 22 k 3.50 ▲ 0.05
3,500/2,500 TEU (GL) 23 k 1.61 ► 0.00
4,250/2,800 TEU (GL) 24 k 2.92 ► 0.00
5,500/4,200 TEU (GL) 25 k 3.00 ▼ 0.17
6,500/4,800 (GL) 25 k 4.25 ▼ 0.13
Index Total 58.26 ▼ 0.30
0
40
80
120
160
200
Jan-0
8
Apr-
08
Jul-
08
Oct-
08
Jan-0
9
Apr-
09
Jul-
09
Oct-
09
Jan-1
0
Apr-
10
Jul-
10
Oct-
10
Jan-1
1
Apr-
11
Jul-
11
Oct-
11
Jan-1
2
Apr-
12
Jul-
12
Oct-
12
Jan-1
3
Apr-
13
Jul-
13
The Box Index B O X i
Unsurprisingly, a further mellowing of the market was evident this week as the peak holiday season kicks into gear. This limited enquiry has manifested itself in a slight softening of rates in certain sectors as owners of prompt tonnage struggle to find employment, although the resulting 0.30 point drop in our BOXi is relatively academic with such a small turnover of fixtures being concluded, so it would be naive to read too much into this. It is in the larger sizes where the supply/demand balance seems to be shifting gently, though possibly temporarily, into charterers’ favour. Indeed, an owner of two prompt 8,500TEU units in the Far East has only managed to find short term employment for one vessel at rates around US$1,000 below last done, while the other unit remains spot; this in a sector that until recently was receiving much of the attention, with speculation that it was an undersupplied segment of the market. In the sub-Panamax market, the situation remains similar to previous weeks with the only slight changes being the continued improvement in the 2800TEU gearless sector at the expense of their 2,500TEU geared relatives which had been looking relatively cheap on a slot cost basis. In addition, these gearless units are now increasingly being utilised for services linking ports in developing countries which have only recently added shore cranes and so a cheaper slot cost has encouraged a number of the more conscientious charterers to make the shift. Whether this bodes well for the larger 3,500TEU gearless segment in light of the possible future cascading process, however, remains to be seen. For the feeders, activity has been particularly low, though rates are stable as the market is not overburdened with supply. Charterers are predominantly using the maximum dates of flexible periods with rates having generally firmed over recent months, meaning redelivery notices and actual open positions have, thankfully for owners, been relatively thin on the ground.
