Market insight By Stelios Kollintzas Specialized Products Chartering As we go through the end of the 2nd quarter of the year it is evident that the tanker shipping markets have been rewarding and definitely been show- ing a lot more promise compared to other sectors. Even now that new deliv- eries are hing the water fast, the market has been able to absorb the extra tonnage either in long term contracts or in the spot market. The edible oil market has also had its stake on that by employing a handful of tonnage. In fact, lately it has been a lot livelier both out of S. America and out of SE Asia. As far as the palm oil regional market is concerned, the 2nd quarter of the year has offered much more enquiry than the first. This is to point out that the implementaon of 0% export tax on Malaysian crude palm oil in May and June have had a posive impact as buyers have been taking advantage of the tax-free cargoes out of the country boosng the shipments in both India and Europe. At the me of wring the regional market remains steady on healthy levels with a slight cooling-off. Most of second half June enquiries are already covered, while July quotes are already in the market. It remains to be seen if July will follow the same strong trend, while Indonesian export taxes are expected to be reinstated back in August. On the long-haul trade now, the youngest ECO-MR Ships are traded between 22,000 USD - 23,000 USD pd , while older tonnage can earn as much as 20,000 USD pd for a trip to MED,UKC or USA which lasts 45-120 days. The crical factor for owners profit margin though, namely the 380 bunker price -now at abt 355USD/pt - has recently shown an overall upward trend causing concerns. In the last month we have seen a very healthy number of vessels fixed for vegetable oils out of South America and an even greater figure of soya-bean oil crop, climbing to around 500.000t. While we expected the increased producon to accommodate more ships on the trade, strikes and groundings have resulted in big line-ups. As such, it seems that it will take more me for the current output to be deployed, while we expect more cargoes in the coming weeks. Given the current acvity along with a firm CPP mkt in the Atlanc basket, freight rates have levelled at around 44-45 USD/pmt basis 2/2 ports, while rates for CIQ posions desned to CHINA are in the 50s for 40,000mtons of cargo. Probably though, the best earners are the Iran candi- dates, which have also been very much in the frame during last month, earn- ing USD low-mid 70s bss 30,000mtons. Going forward, rates will once again be dictated by the western CPP market and how it will move during the usu- ally slower summer months. Lastly, Black Sea exports have seen lile change in export volumes the last month, with a relavely low number of fixtures. It is evident that the differ- ence amongst the Sunflower oil and the 120 USD cheaper South American soya-bean oil has shiſted importer’s demand to the most favorable origin. The current shiſt is expected to be greater the coming weeks as soya-bean oil prices are expected to sustain their compeve selling price. Only a few larger stems of up to 30,000mtons looking at India and Iran have drawn some aenon, while smaller cargoes of 6-7,000mtons have given lile excitement with charterers choosing among several loaders It is worth nong that trade volumes are expected to further increase in the next few years, primarily driven by higher consumpon of edible oils in emerging economies, in parcular China and India. While palm oil exports represents approximately two thirds of global edible oil exports, vegetable oil seaborne trade volumes have been growing remarkably. The good part for the our industry is that exporters rely primarily on shipping for exporng and total trade figures are fairly translated in actual seaborne trade figures. Chartering (Wet: Soſt- / Dry: Stable + ) The Dry Bulk market slightly improved last week mostly supported by Panamaxes, while things in the Capesize segment remained quiet. The BDI closed today (09/06/2015) at 612 points, up by 2 points compared to Monday’s levels (08/06/2015) and an increase of 21 points when compared to previous Tuesday’s closing (02/06/2015). Enquiry in the WAF region mainly supported the crude carriers market last week. The BDTI Monday (08/06/2015) was at 887 points, an increase of 39 points and the BCTI at 718, an increase of 26 points compared to previous Monday’s (01/06/2015) levels. Sale & Purchase (Wet: Firm+ / Dry: Firm+ ) SnP acvity accelerated last week with crude carriers proving popular amongst buyers, while over at the Dry Bulk sector the Capesize resales at further discounted levels remain evidence of market senment in regards to the segment. On the tanker side, we had the en-bloc sale of the “ENERGY R” (319,012dwt-blt 03, S. Korea) and the “POWER D” (319,012dwt-blt 03, S. Korea) which were picked up by Greek owner, Navios, for a price of US$ 43.0m each. On the dry bulker side we had the sale of the “NORD LIBERTY” (58,750dwt-blt 08, Philippines), which was reported being sold for a price of $12.9m. Newbuilding (Wet: Stable + / Dry: Stable - ) The end of spring season found the newbuilding market in the same unchanged stage of the past months, with weak acvity and non- existent dry bulk ordering prevailing, while conversions and opons are sll making up a good part of the most recent reported deals. Prices appear to have momentarily stopped their downward movement but we reiterate our opinion that there is more room for further correcons during the summer season, where slower acvity usually prevails. At the same me, the trend of converng bulker orders seems to be holding strong. Orders that were placed following the good market the sector enjoyed back in the end of 2013, connue to trouble owners behind them and it seems that a big part of those who sll can, will opt for con- verng their order usually to a tanker one, while without trying to sound too pessimisc, we hope history won’t repeat itself and whatever tanker orders - original ones or conversions - are currently being placed, won’t come back to haunt their owners a couple of years down the line as it is currently happening with big bulkers. In terms of recently reported deals, Greek owner, Thenamaris, has placed an order for two firm VLCCs (300,000dwt) at Hyundai, in S. Korea, for a price of $95.5 each and deliv- ery set in 2017. Demolion (Wet: Stable - / Dry: Soſt - ) Demolion prices in the Indian subconnent appear to have stabilized for now, following a month of significant discounts that have leſt the market with a lower new normal in terms of acvity volume and price levels matching the year’s lows back in the beginning of March. Wheth- er the summer season will connue in the same mood is too soon to tell. Breakers in Bangladesh and Pakistan will focus on the outcome of their countries’ respecve budgets, both due before the end of the week. Should rumors for increased tax on the industry are announce, this will normally affect both prices and breakers’ appete to acquire tonnage. On the other hand things in India seem to be slightly beer, and this is evident in the presence of sales involving Indian breakers, who now seem a bit encouraged by the revival of both local steel prices and the Indian Rupee. Prices this week for wet tonnage were at around 225-385 $/ldt and dry units received about 210-365 $/ldt. Weekly Market Report Issue: Week 23 | Tuesday 9 th June 2015
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Weekly Market Report - Hellenic Shipping News Worldwide€¦ · Given the current activity along with a firm PP mkt in ... received about 210-365 $/ldt. Weekly Market Report Issue:
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Transcript
Market insight By Stelios Kollintzas Specialized Products Chartering
As we go through the end of the 2nd quarter of the year it is evident that the tanker shipping markets have been rewarding and definitely been show-ing a lot more promise compared to other sectors. Even now that new deliv-eries are hitting the water fast, the market has been able to absorb the extra tonnage either in long term contracts or in the spot market. The edible oil market has also had its stake on that by employing a handful of tonnage. In fact, lately it has been a lot livelier both out of S. America and out of SE Asia.
As far as the palm oil regional market is concerned, the 2nd quarter of the year has offered much more enquiry than the first. This is to point out that the implementation of 0% export tax on Malaysian crude palm oil in May and June have had a positive impact as buyers have been taking advantage of the tax-free cargoes out of the country boosting the shipments in both India and Europe. At the time of writing the regional market remains steady on healthy levels with a slight cooling-off. Most of second half June enquiries are already covered, while July quotes are already in the market. It remains to be seen if July will follow the same strong trend, while Indonesian export taxes are expected to be reinstated back in August. On the long-haul trade now, the youngest ECO-MR Ships are traded between 22,000 USD - 23,000 USD pd , while older tonnage can earn as much as 20,000 USD pd for a trip to MED,UKC or USA which lasts 45-120 days. The critical factor for owners profit margin though, namely the 380 bunker price -now at abt 355USD/pt - has recently shown an overall upward trend causing concerns.
In the last month we have seen a very healthy number of vessels fixed for vegetable oils out of South America and an even greater figure of soya-bean oil crop, climbing to around 500.000t. While we expected the increased production to accommodate more ships on the trade, strikes and groundings have resulted in big line-ups. As such, it seems that it will take more time for the current output to be deployed, while we expect more cargoes in the coming weeks. Given the current activity along with a firm CPP mkt in the Atlantic basket, freight rates have levelled at around 44-45 USD/pmt basis 2/2 ports, while rates for CIQ positions destined to CHINA are in the 50s for 40,000mtons of cargo. Probably though, the best earners are the Iran candi-dates, which have also been very much in the frame during last month, earn-ing USD low-mid 70s bss 30,000mtons. Going forward, rates will once again be dictated by the western CPP market and how it will move during the usu-ally slower summer months.
Lastly, Black Sea exports have seen little change in export volumes the last month, with a relatively low number of fixtures. It is evident that the differ-ence amongst the Sunflower oil and the 120 USD cheaper South American soya-bean oil has shifted importer’s demand to the most favorable origin. The current shift is expected to be greater the coming weeks as soya-bean oil prices are expected to sustain their competitive selling price. Only a few larger stems of up to 30,000mtons looking at India and Iran have drawn some attention, while smaller cargoes of 6-7,000mtons have given little excitement with charterers choosing among several loaders
It is worth noting that trade volumes are expected to further increase in the next few years, primarily driven by higher consumption of edible oils in emerging economies, in particular China and India. While palm oil exports represents approximately two thirds of global edible oil exports, vegetable oil seaborne trade volumes have been growing remarkably. The good part for the our industry is that exporters rely primarily on shipping for exporting and total trade figures are fairly translated in actual seaborne trade figures.
Chartering (Wet: Soft- / Dry: Stable + )
The Dry Bulk market slightly improved last week mostly supported by Panamaxes, while things in the Capesize segment remained quiet. The BDI closed today (09/06/2015) at 612 points, up by 2 points compared to Monday’s levels (08/06/2015) and an increase of 21 points when compared to previous Tuesday’s closing (02/06/2015). Enquiry in the WAF region mainly supported the crude carriers market last week. The BDTI Monday (08/06/2015) was at 887 points, an increase of 39 points and the BCTI at 718, an increase of 26 points compared to previous Monday’s (01/06/2015) levels.
Sale & Purchase (Wet: Firm+ / Dry: Firm+ )
SnP activity accelerated last week with crude carriers proving popular amongst buyers, while over at the Dry Bulk sector the Capesize resales at further discounted levels remain evidence of market sentiment in regards to the segment. On the tanker side, we had the en-bloc sale of the “ENERGY R” (319,012dwt-blt 03, S. Korea) and the “POWER D” (319,012dwt-blt 03, S. Korea) which were picked up by Greek owner, Navios, for a price of US$ 43.0m each. On the dry bulker side we had the sale of the “NORD LIBERTY” (58,750dwt-blt 08, Philippines), which was reported being sold for a price of $12.9m.
Newbuilding (Wet: Stable + / Dry: Stable - )
The end of spring season found the newbuilding market in the same unchanged stage of the past months, with weak activity and non-existent dry bulk ordering prevailing, while conversions and options are still making up a good part of the most recent reported deals. Prices appear to have momentarily stopped their downward movement but we reiterate our opinion that there is more room for further corrections during the summer season, where slower activity usually prevails. At the same time, the trend of converting bulker orders seems to be holding strong. Orders that were placed following the good market the sector enjoyed back in the end of 2013, continue to trouble owners behind them and it seems that a big part of those who still can, will opt for con-verting their order usually to a tanker one, while without trying to sound too pessimistic, we hope history won’t repeat itself and whatever tanker orders - original ones or conversions - are currently being placed, won’t come back to haunt their owners a couple of years down the line as it is currently happening with big bulkers. In terms of recently reported deals, Greek owner, Thenamaris, has placed an order for two firm VLCCs (300,000dwt) at Hyundai, in S. Korea, for a price of $95.5 each and deliv-ery set in 2017.
Demolition (Wet: Stable - / Dry: Soft - )
Demolition prices in the Indian subcontinent appear to have stabilized for now, following a month of significant discounts that have left the market with a lower new normal in terms of activity volume and price levels matching the year’s lows back in the beginning of March. Wheth-er the summer season will continue in the same mood is too soon to tell. Breakers in Bangladesh and Pakistan will focus on the outcome of their countries’ respective budgets, both due before the end of the week. Should rumors for increased tax on the industry are announce, this will normally affect both prices and breakers’ appetite to acquire tonnage. On the other hand things in India seem to be slightly better, and this is evident in the presence of sales involving Indian breakers, who now seem a bit encouraged by the revival of both local steel prices and the Indian Rupee. Prices this week for wet tonnage were at around 225-385 $/ldt and dry units received about 210-365 $/ldt.
The crude carriers market, closed off the week displaying a mixed picture across the different size segments, while in those cases that rates noted further weekly declines, these were of fairly small scale. Sentiment has notably improved compared to the week prior as revived enquiry out of both the Middle East and W. Africa has supported rates, while period activi-ty also looked promising. At the same time, the fact that OPEC’s meeting last week held no surprises in regards to production levels, is adding to market expectations for the price of oil to remain within range and thus sustain healthy demand levels that will keep supporting freight rates.
Rates for VLs closed off the week noting small declines across the board, while the positive spillovers from the extraordinary come back of the WAF market fed through Middle East as well, where things were admittedly qui-eter but definitely busier compared to the week prior.
The surge in W. Africa activity last week also benefitted Suezmax tonnage in the region that enjoyed strong demand throughout the week, a demand which nonetheless failed to lift rates as just enough open positions allowed charterers to have the last word.
With the exception of the cross-Med market, rates for Aframaxes closed off the week on a positive note, while the Caribs Afra surged on the back of strong enquiry and relatively tight supply of tonnage in the region.
Sale & Purchase
In the VLCC sector, we had the en-bloc sale of the “ENERGY R” (319,012dwt-blt 03, S. Korea) and the “POWER D” (319,012dwt-blt 03, S. Korea) which were picked up by Greek owner, Navios for a price of US$ 43.0m each.
In the Aframax sector we had the sale of the “TEMPERA” (106,034dwt-blt 02, Japan), which was sold to French owner, Perenco SA for a price in the region of $32.5m.
The Dry Bulk market closed off last slightly up last week, with the BDI re-
gaining the 600 points level, while the driving force behind the increase was
the Panamax sector, which following some very challenging weeks during
May, finally managed to take a small breather. Expectations in regards to
the summer season vary across the market. The more optimistic are focus-
ing on Chinese iron ore inventories and the fact that traditionally the re-
stocking that takes place following a decrease in port inventories boosts
Capesize rates and lifts the entire market. Although this is true, the fact that
Chinese demand for steel has been faltering is what is key here, while let’s
not forget that last year, which was an exceptional year in terms of Chinese
iron ore imports, rates disappointed vastly, which bring us back to the ton-
nage oversupply issue that still seems to be weighing heavily on the market.
The Capesize market was quiet last week, especially in the Atlantic, while
talk of iron ore majors being active in the Pacific emerged just before the
market slid into the weekend.
The Atlantic Panamax kept improving last week as ECSA remained a steady
provider of fresh enquiry amidst balanced supply of tonnage in the region.
The Pacific market kept moving sideways at the same time, while period
enquiry saw some steady numbers.
The Atlantic Handysize/ Handymax/ Supramax market improved significant-
ly last week with some very good numbers being reported positionally. At
the same time the Black Sea/Med witnessed persisting lack of enquiry,
while steady numbers were being observed in the Far East.
Sale & Purchase
In the Supramax sector, we had the sale of the “NORD LIBERTY” (58,750dwt-blt 08, Philippines), which was reported being sold for a price of $12.9m.
In the Handysize sector we had the sale of the “ORIENTE CHALLENGER” (24,600dwt-blt 01, Japan), which was sold to Chinese buyers for a price in the region of $4.5m.
Newbuilding activity made a rather impressive summer debut, with an in-creased number of orders being reported last week, while the absence of recently inked contracts involving dry bulkers remained the distinct charac-teristic of the market. Despite this recent spark in newbuilding activity, we reiterate our opinion that things will remain quiet during the summer season and probably afterwards as well. In terms of total activity across both tankers and bulkers during the first five months of the year, this is below the number recorded during the same period in 2014. Although in the case of bulkers this doesn't come as a surprise at all, it is interesting to note that even in regards to tankers - the star sector of the year - the level of enthusiasm surrounding new orders isn't as excessive as one would think, while the conversions from previous dry bulk orders into tanker ones have made up for a good-sized part of activity so far.
In terms of recently reported deals, Greek owner, Thenamaris, has placed an order for two firm VLCCs (300,000dwt) at Hyundai, in S. Korea, for a price of $95.5 each and delivery set in 2017.
Newbuilding Market
20
60
100
140
180
mil
lion
$
Tankers Newbuilding Prices (m$)
VLCC Suezmax Aframax LR1 MR
Week
23
Week
22±% 2014 2013 2012
Capesize 180k 50.0 50.0 0.0% 55.8 49 47
Kamsarmax 82k 27.5 27.5 0.0% 30.4 27 28
Panamax 77k 26.5 26.5 0.0% 29.2 26 27
Ultramax 63k 25.5 25.5 0.0% 27 25 25
Handysize 38k 21.5 21.5 0.0% 23 21 22
VLCC 300k 96.0 96.0 0.0% 98.6 91 96
Suezmax 160k 64.5 64.5 0.0% 65 56 58
Aframax 115k 53.0 53.0 0.0% 54 48 50
LR1 75k 46.0 46.0 0.0% 45.9 41 42
MR 50k 36.5 36.5 0.0% 36.9 34 34
190.0 190.0 0.0% 186.0 185 186
77.0 77.0 0.0% 78.4 71 71
68.0 68.0 0.0% 66.9 63 62
46.0 46.0 0.0% 44.3 41 44
Vessel
Indicative Newbuilding Prices (million$)
Bu
lke
rsTa
nke
rs
LNG 160k cbm
LGC LPG 80k cbm
MGC LPG 55k cbm
SGC LPG 25k cbm
Gas
10
30
50
70
90
110
mil
lion
$Bulk Carriers Newbuilding Prices (m$)
Capesize Panamax Supramax Handysize
Units Type Yard Delivery Buyer Price Comments
2 Tanker 300,000 dwt Hyundai, S. Korea 2017 Greek (Thenamaris) $ 95.5m
3+1 Tanker 154,000 dwt Samsung, S. Korea 2017-2018 Canadian (Teekay Offshore) $ 121.5mDP2 shuttle tanker, 15yr
EC Canada T/C
4+4 Tanker 115,000 dwt Daehan, S. Korea 2016-2017Singaporean (Jell icoe
Tankers)$ 55.0m Ice 1C, T/C to Shell
2 Tanker 75,000 dwtHyundai Mipo, S.
Korea2017-2018 Italian (D'Amico) $ 44.0m
LR1, addition to the
April order
1+1 Gas 170,000 cbm Hyundai, S. Korea 2018 Norwegian (Hoegh LNG) undisclosedLNG FSRU, total 8 on
order
2 Gas 84,000 cbm DSME, S. Korea 2017 Chinese (China Peace) $ 80.0m LPG
2 Gas 53,000 cbmShangai Jiangnan,
China2016-2017 Denmark (Maersk) undisclosed LPG
2 Container 1,900 teu Hanjin, S. Korea - Belgian (Delphis) $ 34.0m options, ice class
1 Container 1,800 teu Daesun, China - S. Korean (Dongjin) undisclosed bangokmax
2 PCTC 7,400 ceu Hyundai, S. Korea 2017 S. Korean (EUKOR) undisclosed
With prices remaining under pressure and activity still below the levels the market has been witnessing throughout the biggest part of the year so far, sentiment in the demolition market remains soft, while the budget an-nouncements out of both Pakistan and Bangladesh left the market with a bitter sweet taste last week. From one side the introduction of increased duties in regards to the ship-recycling industry in Pakistan is expected to push demo prices further down in the country, while on the other hand higher duties imposed on steel imports in Bangladesh will ease pressures on local steel prices from Chinese exports to the country. At the same time India seems to be testing the waters with a few sales being reported to local play-ers, who given their capacity and lack of action in the previous months are theoretically well positioned to stock up prior the monsoon season. Whether they will chose to do so is another question, while the recent recovery of steel prices in the country is more than likely to push towards this direction. Prices this week for wet tonnage were at around 225-385 $/ldt and dry units received about 210-365 $/ldt.
The highest price amongst recently reported deals, was that paid by Indian breakers for the chemical tanker “CASTILLO DE PLASENCIA” (12,219dwt-4,330ldt-blt 87), which received $600/ldt as it included 722 tons of stainless steel.
Demolition Market
Week
23
Week
22±% 2014 2013 2012
Bangladesh 380 380 0.0% 469 422 441
India 380 380 0.0% 478 426 445
Pakistan 385 385 0.0% 471 423 444
China 225 225 0.0% 313 365 384
Bangladesh 365 370 -1.4% 451 402 415
India 365 370 -1.4% 459 405 419
Pakistan 365 365 0.0% 449 401 416
China 210 210 0.0% 297 350 365
Dry
Indicative Demolition Prices ($/ldt)
Markets
We
t
200
250
300
350
400
450
500
550
$/l
dt
Wet Demolition Prices
Bangladesh India Pakistan China
200
250
300
350
400
450
500
550
$/ld
t
Dry Demolition Prices
Bangladesh India Pakistan China
Name Size Ldt Built Yard Type $/ldt Breakers Comments
DB 101 93,400 35,000 1978 IHI - KURE, PLATFOR
M/Jack
Up
$ 285/Ldt undisclosed
ZIM ASIA 45,850 16,900 1996HDW AG - KIEL -
GEU, GermanyCONT $ 400/Ldt undisclosed Indian subcontinent
AMAN TRADER 48,320 10,166 1990BRODOSPLIT,
YugoslaviaBULKER $ 368/Ldt Bangladeshi
CASTILLO DE
PLASENCIA12,219 4,330 1987
MITSUBISHI
SHIMONOSEKI,
Japan
TANKER $ 600/Ldt Indian incl. 722 tons StSt
Demolition Sales
The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without mak-ing guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
VLCC giant Gener8 Maritime has added a number of banks to its initial public offering effort.
Peter Georgiopoulos-fronted Gener8, which is look-ing to take a 46 strong VLCC fleet to Wall Street, launched IPO plans last month with Citigroup and UBS.
An updated filing has revealed Jefferies and Evercore have now been added as joint book running manag-ers.
DNB Markets and SEB are also on board as senior co-managers while Pareto Securities and Axia have been brought in as co-managers.
Gener8, formed from the merger of General Mari-time (Genmar) and Navig8 Crude Tankers, would be a fifth public company for Georgiopoulos.
As TradeWinds reported when the IPO first emerged, Georgiopoulos has overseen the purchase of over 200 vessels at an aggregate of over $7.5bn during his career.
Navig8, led by Nikolas Busch and Gary Brocklesby, will manage the VLCCs and suezmaxes.” (Andy Pierce, Trade Winds)
Commodities & Ship Finance
5-Jun-15 4-Jun-15 3-Jun-15 2-Jun-15 1-Jun-15W-O-W
Change %
10year US Bond 2.410 2.310 2.380 2.270 2.190 13.7%