WEEKLY SHIPPING MARKET REPORT WEEK 33 - 15 th July to 19 TH August 2011 - 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 33
- 15th July to 19TH August 2011 -
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]
Iron Ore-China steel futures rise for 2nd day, ore firm Shanghai rebar futures rose for a second session on Tuesday, supported by expectations a brisk construction sector will continue to prop up demand and output in top market China. Iron ore prices were benefitting from the resilience in China's steel prices, with spot rates staying firm although some mills are exercising caution in replenishing inventories, waiting for price dips before buying. The most-traded rebar contract on the Shanghai Futures Exchange gained 0.3 percent to 4,828 yuan a tonne by the midday break. Global crude steel output rose 11.5 percent from the previous year to 127.477 million tonnes in July as China's production remained strong, data from the World Steel Association showed on Monday. While total world output was down slightly from 127.746 million tonnes in June, the figure was still near the record 129.865 million tonnes produced in May. China's crude steel output hit 59.3 million tonnes in July versus a record 60.245 million tonnes in May. "China steel production has surprised people on the upside this year," Macquarie analyst Colin Hamilton told Reuters Insider. "The strength is in the construction sector... In China 55 percent of steel goes into infrastructure and construction, it is still at that stage of urbanisation and industrialisation. There is still plenty of growth to come." While global steel output this month may steady at current levels due to holidays in Europe and the Middle East and with China's output stabilising, production elsewhere may drop, said Steel Market Intelligence analyst Michelle Applebaum. "We suspect that production in North America and Asia will be down overall, as weak pricing and summer holidays have hastened summer maintenance outages and slower production overall," Applebaum said in a note. CAUTIOUS BUYING The strength in steel prices is boosting demand for iron ore, the key ingredient in making steel, although some mills are buying cautiously. "Prices are still quite high so unless it's necessary for mills to replenish their inventories, they would choose to wait and see," said a shipping manager for an iron ore trading firm in Shanghai. Data showing China's factory sector is likely to slow slightly for a second consecutive month in August as sluggish overseas demand sapped new orders is one cause for caution. HSBC's China Flash PMI, designed to preview China's factory output before official data is released, edged up to 49.8 in August, from July's final reading of 49.3. But that still left the index a touch below the 50-point mark that demarcates expansion from contraction in activity. HSBC publishes its final China PMI index for August on Sept 1. Offers for Indian 63.5/63-grade ore rose a dollar to $186-$188 a tonne, including freight, on Tuesday, although quotes for Australian material were steady, with Newman fines at $181-$183, according to Chinese consultancy Umetal. The ongoing monsoon season as well as congested ports have disrupted shipments out of India, the world's No. 3 iron ore supplier after Australia and Brazil.
"In one week, you can only see four to five cargoes from India when normally it's around 8-10 shipments," said the shipping manager. "But we are expecting some low-grade iron ore from India tomorrow, for 58 percent Fe and below." Iron ore with 62-percent iron content rose 50 cents to $177.80 a tonne on Monday, matching a level reached on Aug. 9, according to The Steel Index. Metal Bulletin's 62-percent reference price eased 11 cents to $177.33 and a similar gauge by Platts IODBZ00-PLT was steady at $179.50. (Reuters) Heidmar targets ETA Emirates Trading Agency’s (ETA’s ) shipping empire is under fire in the US following the collapse of a commodity swap contract with Heidmar. The Connecticut-based pool operator is looking to claw back over $7.7m by way of a “Rule B” attachment order that names the Dubai-based tanker and bulker owner and three of its foreign affiliates as defendants. (click HERE to read the complaint in full) According to court documents, ETA has failed to settle monthly payments tied to a bunker swap contract penned in 2008, which the company used as a hedge against risk associated with fluctuations in the marine fuel oil market. “If the floating commodity reference price was above the fixed price for the month, Heidmar owed an amount to ETA based on the price difference and the quantity; if the floating commodity reference was below the fixed price, ETA owed an amount to Heidmar based on the price difference and the quantity,” the lawsuit explains. Heidmar claims the owner breached a “Special Payment Schedule Agreement” it forged on 1 February 2009 whereby ETA promised to pay a minimum of $500,000 per month until the contracts were satisfied. The operator is looking to freeze cash and other assets controlled by ETA and Dolphin Maritime of Cyprus in addition to Panamanian affiliates Queen Marine and Emperor Marine, entities which made payments to Heidmar on behalf of the parent at various times during the swap contracts. While ETA-linked debts, freight and hire credits have landed in the crosshairs, funds held by the Registry of the Court at a New Haven, Connecticut branch of Bank of America and by Hedimar subsidiary Sigma Tankers, appear to be the plaintiff’s primary targets. As TradeWinds has reported, there was a time when ETA was considered the rising star of the Middle Eastern shipping universe but the company was hit hard by the financial crisis in late 2008. Since then, it has been mired in a string of lawsuits from other shipowners over defaults on charter hire and cancelled contracts. The actions have unravelled ETA’s complex corporate hierarchy and the reorganisation of its global empire, which helped the company shield its assets from creditors when financial difficulties began to unfold in 2009 and 2010, Heidmar claims. Headquartered in Dubai, ETA controls a fleet of 34 bulkers, tankers and products carriers, according to data from Clarksons. (Tradewinds)
In Brief: Indices continued the upward movement as a result of the sharp increase on the capesize market, and the other sizes followed the same way. At week’s closing, BDI gained 156 points, BCI gained 413 points, BPI gained 68 points, BSI gained 71 points, and BHSI gained 7 points. Capes: A positive week across both basins with rates continuously rising. In the Atlantic we noticed that many new enquiries have entered the market for both Transatlantic and Fronthaul. In the Transatlantic trade, rates improved from USD 10.000 per day of last week, close to USD 14.000 per day for BCI type vessels. On the Brazil/China route, rates began from USD 19.50 pmt at the beginning of the week, and climbed up to USD 22.00 pmt towards week’s closing. In the Pacific region, the iron ore majors were also active and covered about 15 vessels for the Australia/China trade. Rates improved from USD 8.25pmt up to USD 8.75 pmt basis. Panamax: Activity increased across both basins and rates followed the same trend. In the Atlantic many cargoes emerged the market which seemed to be in good balance with the available tonnage. Rates for Transatlantic round started from USD 14.000 per day and continued rising closer to USD 15.000per day. On the Fronthaul trade, rates moved upwards close to USD 22.000 basis Continent/Mediterranean sea delivery, while some vessels opening USG were indicating levels around USD 25.000 + 500.000 ballast bonus. ECSA was not as active as it used to be, since the grain season comes to an end. In the Pacific activity improved too, mostly driven by the Indonesian coal exports for end August dates. Rates for Pacific improved close to 10-11.000per day, while some Charterers were willing to pay up to USD 12.000 basis S. China delivery for a trip to India. Rates for NOPAC improved significantly with vessels reported fixed at levels close to USD 11.000 per day basis delivery N.China/Japan range. (M/V Achilles 76878/04’).
Supramax: Activity remained in good levels.
In the Atlantic region, market was tight especially for prompt tonnage. USG market remains strong with rates for East Med., direction at USD mid twenties, while for F.East direction fixtures reported at USD 30.000 per day. On the ECSA, rates for trips back to Continent/Mediterranean were at USD 14-15.000 basis West Africa delivery, or the equivalent ballast bonus on APS basis In the pacific, Indonesia remained the driving force with coal and nickel ore to China. Rates for Pacific round improved closed to USD 12.000 per day, and in some cases fixtures reported at higher levels close to USD 14.000 basis N.China delivery for trip via Indonesia with Nickel ore back to China. Handysize: Market followed the same trend. In the Atlantic basin we see the usual cargoes ex Mediterranean to ECSA, and many grain parcels ex Black Sea. Many of the cargoes are destined for N.Africa, while there were also many going towards East, for those who could consider the G.O.A transit. On the ECSA market grain parcels were not plenty and same happened also with the sugar parcels. In the Pacific basin, Indonesia lead the way with many stems of coal to China and India. Ex N.China, there is still plenty of clinker to destination Bangladesh, and some fresh inquiries of steel parcels to S.E.Asia.
Dry Bulk - Chartering
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Baltic Indices – Dry Market (*Friday’s closing values)