WEEKLY SHIPPING MARKET REPORT WEEK 17 - 23 th April – to 30 th April 2013 - Legal Disclamer The information contained herein has been obtained by various sources. Although every effort has been made to ensure that this information is accurate, complete and up to date, Shiptrade Services S.A. does not accept any responsibility whatsoever for any loss or damage occasioned or claimed, upon reliance on the information, opinions and analysis contained in this report. Researched and compiled by: Shiptrade Services SA, Market Research on behalf of the Sale & Purchase, Dry Cargo Chartering and Tanker Chartering Departments. For any questions please contact: [email protected]Shiptrade Services SA Tel +30 210 4181814 [email protected]1st Floor, 110/112 Notara Street Fax +30 210 4181142 [email protected]185 35 Piraeus, Greece www.shiptrade.gr [email protected]
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WEEKLY SHIPPING
MARKET REPORT WEEK 17
- 23th April – to 30th April 2013 -
Legal Disclamer
The information contained herein has been obtained by various sources. Although every effort has been made to ensure that this information is accurate, complete and up to date, Shiptrade Services S.A. does not accept any responsibility whatsoever for any loss or damage occasioned or claimed, upon reliance on the information, opinions and analysis contained in this report.
Researched and compiled by: Shiptrade Services SA, Market Research on behalf of the Sale & Purchase, Dry Cargo Chartering and Tanker Chartering Departments. For any questions please contact: [email protected]
Leading yards say newbuilding prices have bottomed-out
Prices of newbuilding vessels could well have bottomed out as shipowners are embarking on a new cycle of ordering racing against the trend of newbuilding prices slowly inching up. Asian yards such as China-based Yangzijiang Shipbuilding and South Korea's Samsung Heavy Industries (SHI) believe that the lowest point for newbuilding prices has now been passed. “Now is possibly one of the best chances for shipowners to order new ships. The bottom of newbuilding prices has been reached and prices have firmed by 3-5% since the last quarter of 2012,” said Ren Yuanlin, executive chairman of Yangzijiang. However, Ren pointed out that there would not be a major upswing in prices, at least over the course of this year, but the market should not expect prices to go any lower. In the dry bulk sector, for instance, with the Baltic Dry Index (BDI) at below 1,000 points does not encourage substantial increase in newbuilding prices by shipyards as owners are already not generating any profits, he explained. “Unless the BDI can hover around 1,500 points over a two- to three-month period, then I'd say newbuilding prices can simultaneously be raised to match improved market profitability,” he said. Commenting on the commercial ship newbuilding market Korean shipbuilder SHI is seeing increased enquiry as owners look to take advantage of what may well be the low point for newbuilding prices.(Seatrade Global)
German, UK banks slam U.S. plans to toughen capital rules
German and British banking lobby groups slammed plans by U.S. regulators to toughen rules on foreign banks, saying they risk fragmenting banking supervision and causing major disruption to U.S. bank operations.Germany's banking association, BdB, said the push by U.S. regulators to tighten oversight of foreign banks would put European banks at a competitive disadvantage internationally. The British Bankers' Association (BBA) said imposing localised capital and liquidity requirements on foreign banks "will cause significant disruption to many foreign banks creating onerous and complex operational issues." In December, Federal Reserve Board Governor Daniel Tarullo said foreign banks should be required to hold as much capital as their U.S. counterparts, regardless of how their overseas parent companies are funded - a move that could trigger competition among regulators requiring banks to hold different levels of capital. "If other countries followed the U.S. example, it would result in a dangerous fragmentation of financial markets. Different rules and standards would make markets more unstable and inefficient," BdB managing director Michael Kemmer said in a statement. "These new rules amount to a clear disadvantage when it comes to competing with U.S. banks on a global level." The United States has traditionally relied on foreign supervisors to regulate overseas banks and specify appropriate levels of capital, just as U.S. banks operating in the euro zone are judged on their worldwide capital.The Fed's measure could be particularly costly for Deutsche Bank, Germany's flagship lender, and to a lesser degree for Britain's Barclays Plc, because of their corporate structure.Foreign banks would have to meet minimum capital and leverage ratios greater than those required under new Basel III global rules, the BBA said in its response to the proposals. "The proposals may lead to the further fragmentation of banking supervision," said Thomas Liew, a policy advisor for the BBA. That could "encourage regulators in other jurisdictions to seek their own
proposals," he said.European Union Internal Market Commissioner Michel Barnier, the EU's top financial regulator, has said the U.S. plan could lead to retaliation from other regulators.As a governor on the Fed Board in Washington, Tarullo is a point person for financial regulation, but also votes at every policy-setting meeting of the U.S. central bank. (Reuters)
Banks' shipping portfolios still under pressure
Impaired loans and losses from banks' shipping portfolios are likely to remain high, Fitch Ratings says. The shipping crisis is likely to last longer than we originally expected, putting greater pressure on the asset quality of banks with large exposures to the sector.On Tuesday German bank NORD/LB announced it had almost trebled loan impairment charges for its ship portfolio in 2012. Other banks have also reported rises to their loss provisions for shipping exposures. The increases were more pronounced for German banks. The prolonged industry downturn has prompted the German regulator BaFin to place greater scrutiny on banks' shipping exposures.We believe the shipping crisis will last longer than originally expected, until at least end-2014. Sectors such as dry bulk, container and crude tanker have particularly suffered from supply overcapacity, meaning that the market imbalances are likely to take longer to ease. Market trends, such as an increased preference for larger and more fuel-efficient vessels, may also further depress demand for certain vessel types in these sectors. Our bank ratings already factor in these risks, so ratings impact is unlikely.The Nordic banks have been able to offset the weaker performance in their shipping loans with resilient Swedish and Norwegian portfolios. The Nordic banks are typically more conservative in financing structures, and focus on larger ship companies with multiple cash flows and a larger fleet of vessels available for collateral. Shipping does not represent a material proportion of the Nordic banks' loans. For example, Nordea's lending to the shipping industry was 3.3% of the group's total. DNB Bank's exposure was less than 10% at end-2012. The downside risk is limited and remains manageable for Nordic banks.In comparison the downside risks are greater for some German banks active in ship lending where a larger proportion of their loans is in shipping. The Kommanditgesellschaft (KG) or limited partnership structure was commonly used for ship financing in Germany before the start of the shipping crisis. Subsequently, German ship lenders have shunned this higher-risk structure as investor appetite changed and banks tightened criteria. But medium-term pressure still arises from "legacy" KG lending exposures. The prolonged shipping downturn continues to constrain the creditworthiness of some German banks active in ship lending, and developments in the shipping industry will remain a key rating driver. Opportunities for banks remain, particularly as some traditional market participants, such as Commerzbank, Lloyds and RBS, are looking to wind down or sell large parts of their shipping portfolios. The lower competition is benefitting lenders' margins, client relationships and collateral, and covenant requirements, partly offsetting the effect of higher loan impairment charges. Stronger-performing sectors such as liquefied natural gas transportation and offshore could offer banks opportunities to strengthen their market position ahead of a sector recovery. Nevertheless, Fitch expects the banks' appetite for providing lending to shipping companies to remain cautious in 2013. (Fitch Ratings)
Shipping , Commodities & Financial News
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Active buyers
Once more the Sale and Purchase activity continued strong as per last. Buyers are quite active browsing the market to find
suitable candidates. In the dry sector we have noticed quite a few reported sales of resale kamsarmax vessels. The wet
sector was even more interesting than previous week; we have noticed many reported sales of modern LR1 tankers and
small modern chemical tankers.
Worth mentioning is the reported en bloc sale of four modern LR1 tankers, namely “Athens Star”, “London Star”, New York
Star” and “Hamburg Star” sold for USD 74 million to undisclosed buyers.
Shiptrades’ enquiry index had decreased last week. In the dry sector, there is still interest for handysize vessels built within
the 90ies up to modern. Handymaxes and supramaxes are also of firm interest especially those that were built late 90ies up
to modern. On the panamax size there is interest especially from the Far Eastern buyers for mid to late 90ies built vessels,
on the other hand more modern panamaxes are attracting the attention of Greek buyers. In the wet sector, modern
handysize tankers are attracting interest, as well with modern MR tankers. Incoming enquiries for modern Aframaxes and
LR2s have been reduced a little, but there is still firm interest for such tonnages.
NEWBUILDINGS
In the newbuilding market we have seen 5 vessels to have been contracted.
3 Tankers (Aframax, MR)
2 LPG
DEMOLITION
The demolition market is firming week by week. Summer is close and buyers in subcontinent are very active. Subcontinent
markets have once more improved, with the Indian market prices to be in the region of USD 430 per LT, the Pakistan
market prices are at USD 435/LT and the Bangladesh market even more firm than previous weeks with prices at USD 430
per LT. The Chinese market remained weaker again this week with prices being in the low side of USD 370 per LT.
Sale & Purchase
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Indicative Market Values – ( 5 yrs old / Mill $ )
Bulk Carriers
Week 17 Week 16 Change %
Capesize 30 30 0.00
Panamax 20.5 20.5 0.00
Supramax 19 19 0.00
Handysize 15 15 0.00
Tankers
VLCC 54 54 0.00
Suezmax 40 40 0.00
Aframax 27 27 0.00
Panamax 25 25 0.00
MR 24 24 0.00
Weekly Purchase Enquiries
SHIPTRADE P/E WEEKLY INDEX
0
20
40
60
80
100
120
140
160
180
30/5
-5/6
/2012
6-1
2/6
/20
12
13-1
9/6
/2012
20-2
6/6
/2012
27/6
-3/7
/2012
4/7
-10/7
/2012
11/7
-17/7
/2012
18-2
4/7
/2012
25-3
1/7
/2012
1-7
/8/2
01
28-1
4/8
/20
12
15-2
1/8
/2012
22-2
8/8
/2012
29/8
-4/9
/2012
5-1
1/9
/20
12
12-1
9/9
/2012
19-2
5/9
/2012
26/9
-2/1
0/2
012
3-9
/10/2
012
10-1
6/1
0/1
217-2
3/1
0/1
224-3
0/1
0/1
231/1
0-6
/11/1
27-1
3/1
1/1
214-2
0/1
1/1
221-2
7/1
1/1
228/1
1-4
/12/1
25-1
1/1
2/1
212-1
8/1
2/1
219/1
2/1
2-8
/1/1
39-1
5/1
/13
16-2
2/1
/13
23-2
9/1
/13
30/1
-5/2
/13
6-1
2/2
/13
13-1
9/2
/13
20-2
6/2
/13
27/2
-5/3
/13
6-1
2/3
/13
13-1
9/3
/13
20-2
6/3
/13
27/3
-2/4
/13
3-9
/4/1
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KOREA CHINA SPORE
KCS GREECE OTHER
Sale & Purchase
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Reported Second-hand Sales
Bulk Carriers Name Dwt DoB Yard SS Engine Gear Price Buyer
Cape Europe 149.425 1993 CSBC, Twn 08/2013 B&W - 8.300.000 Chinese
In Brief: Another slow week in both basins Capes: Slow at the beginning, recovery towards the end of the week The week started in low volume catching up pace towards the end of the week with the BCI ending up at 1246 points increased by 12 points. The atlantic market was slow with the transantlantic round trips closing at around USD 4,000. Fronthaul ex emed reported at USD 24,000 whereas Tubarao/Qingdao route yielding TCE of about USD 17,500 remained slow without many fresh requirements. In the Pacific basin, Australian iron ore trade showed movement but remained more or less at the same levels as last week closing at around USD 7,000 . Pacific round trips ended up at about USD 6,000/6,250. Period levels same as last week at around USD 10,750 for one year. Panamax: Fresh coal requirements from USEC and AUSTRALIA have driven the market upwards In the beginning of this week we noted many fresh coal requirements for Med/Continent as well as Far East, loading mainly from USEC but fm N Continent as well. Consequently the Transatlantic rates were driven upwards as well as the fronthaul. The Transatlantic round rates closed at USD 10,500 and the fronthaul rates basis delivery Continent around USD 17,5/18,000 depending on position and vessel’s particular. In the Pacific Basin, although the cargoes fm SEASIA kept paying levels around USD 9/11,000 k basis dop South China, we noted an increased demand for ships ex North Pacific and Australia. Especially from EC Australia/NOPAC the demand for tonnage was considerably increased this week and the fixing levels basis delivery North China closed at USD 9,000. In the pacific we did not see many period fixtures. In the Atlantic the medium period TC hire rate closed at low- mid teens. Supramax: A rather slow week in both basins- slightly better in the Pacific. Supramax market remained rather steady as the BSI index closed at 900 down by 2 points than last week. Transatlantic rounds were seen closing at USD 17500 levels ex US Gulf basis redelivery Continent and very high teens basis redelivery Emed. Fronthaul activity was limited with some fixtures reported at USD 14000 levels. There was also some coastal activity in ECSA with fixing rates at USD 11000 basis delivery S. Brazil. In the Pacific basin, the market remained steady this week. NOPAC rounds were very limited this week with some fixtures hardly making USD 8000 levels. Indonesian round voyages to India were reported at USD 12000-12500 basis delivery Singapore. India as far as iron ore market is concerned, remained quite with fixtures ex India to China closed at USD 9000. Short period also remained quite with some fixtures at USD 9500 for large modern Supras basis delivery Feast. Handysize: No significant change For one more week we saw stability in the market with the Index closing at 545 points, 6 more than the previous Friday and the physical market remained more or less at same levels. In Atlantic the round trip was done close to USD 9,000 with vessels getting USD 14,000 per day to East Med direction. The latter and Black Sea was very weak position since there were very few firm cargoes paying very low even for PG/Far East direction. Continent was somehow marginally better and we saw a vessel hitting USD 12,000 for East Med. The Pacific market did not improve and the round voyage was done even lower at about USD 6,500 while the NOPAC at USD 6,250. Trips to ECI basis delivery Japan/S. Korea were done at USD 7,500 and backhaul trips were paying very low levels at about USD 5,000. Owners with vessels at ECI suffered for one more week and at WCI/PG levels could make sense only for those who could trade Iran. The area was the strongest in Pacific tough with some short trips with local redelivery fixed at around USD 9,500 per day. Not much on for short period with levels of USD 7/7,500 per day.
Dry Bulk - Chartering
Dry Bulk - Chartering
Dry Bulk - Chartering
Dry Bulk - Chartering
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Baltic Indices – Dry Market (*Friday’s closing values)