Ahoy There!
Yesterday the BDI gained 0.64% closing at 2213. The Pmax girls got the big (3.88%) push followed (although less significantly) by the Smax & Hmax classes leaving only the Capesize class losing ground for the session. We have not had a chance to look at the fixtures for the week but suspect the Pannies are benefiting from some coal movements. I checked the weekly’s that are out his Thanksgiving Day morning and found few stories noteworthy. Our Dry Bits Report will be out around the usual Friday or Saturday as Ski remains occupied with visiting Grandsons.
Enjoy The Holiday
Ski
Dry Bulk Shipping Market Observations & Commentary
Thursday, November 25, 2010
Wednesday, November 24, 2010
Dry Bits
The Baltic Indices remained flat yesterday with the BPI being the only real mover gaining 2.47% to 2112.
I saw in the news (MutualMar) that beginning Dec 1st 2010 the Chinese will have a policy forbidding “vicious competition” among shipping lines. They have decided that zero and negative freight have an adverse effect on the industry. Perhaps they might eventually come to similar conclusions regarding the shipbuilding industry. If they allow too many vessels to be produced nobody will make much money. Don’t hold your breath waiting on that idea.
The South African government is considering regulation of (Richards Bay) coal exports. This stems from a local electricity producer “Eshkom” complaint that the low quality SA coal is being shipped to higher paying import nations (aka India) that also utilize the low end (low calorific value) fuel, rather than sell the coal to them at a lower rate. They worry if the miners sell too much coal to higher priced bidders there won’t be enough left over for them. The scary part being this type news will become more common as supply concerns multiply. Look at the Indian Ore export ban and why the issue came about. It could quickly become a national concern as vote seeking politicians convince the masses that the Country’s “National Resources” are being exploited by foreigners.
The events unfolding in the Korea’s are paramount to all other shipping related stories today. There is no greater threat to our already beleaguered industry. We should all be praying.
Ski
I saw in the news (MutualMar) that beginning Dec 1st 2010 the Chinese will have a policy forbidding “vicious competition” among shipping lines. They have decided that zero and negative freight have an adverse effect on the industry. Perhaps they might eventually come to similar conclusions regarding the shipbuilding industry. If they allow too many vessels to be produced nobody will make much money. Don’t hold your breath waiting on that idea.
The South African government is considering regulation of (Richards Bay) coal exports. This stems from a local electricity producer “Eshkom” complaint that the low quality SA coal is being shipped to higher paying import nations (aka India) that also utilize the low end (low calorific value) fuel, rather than sell the coal to them at a lower rate. They worry if the miners sell too much coal to higher priced bidders there won’t be enough left over for them. The scary part being this type news will become more common as supply concerns multiply. Look at the Indian Ore export ban and why the issue came about. It could quickly become a national concern as vote seeking politicians convince the masses that the Country’s “National Resources” are being exploited by foreigners.
The events unfolding in the Korea’s are paramount to all other shipping related stories today. There is no greater threat to our already beleaguered industry. We should all be praying.
Ski
Tuesday, November 23, 2010
Shipping Markets: Where are the VL's going?
Dear Readers,
I'm sure you've all read the interesting rumours regarding VLBCs (and/or Chinamaxes) and VLCCs. What puts these behemoths in the "Top News" sections is that the sheer volume of cargo they carry and the economies of scale that they allow, can do nothing other than cause a shift in the market. So let's put these rumours to rest and see what the facts say:
Tankers:
With 102 VLCCs available for the next 30 days in the Arabian Gulf, I think it is safe to say that it is a bit overcrowded. In the AG - Far East route, VLCCs were making around $31,000/day more 2 weeks ago, and now they can make around $17,000/day more in the West Africa - U.S. route, than what they are making today. This explains why at least 5 vessels have made their way to West Africa, in ballast conditions no less, and upon hearing a WS77.5 on that route, other owners are also considering it a viable option. This action will no doubt push the West Africa market, while tightening the Arabian Gulf one, hopefully balancing out the oversupply issues that exist.
Bulk Carriers:
Capesizes are the ones that usually lead the market, since the volume they carry has a big impact on commodities. But this looks like it's changing, leaving a big question mark as to whether or not the Capesize vessels will survive. Akis Tsirigakis of Nasdaq-listed Star Bulk Carriers has put in an order for Capes, 2 of which will be delivered next year. He believes that economies of scale will move people to order larger vessels. On that note, Vale is expecting their first of 30 VLBCs (around 400,000dwt) in 2011. Even their competitor Rio Tinto has gone that route, and they want to make a "Brazil - China Highway" for Iron Ore (to begin with). Their argument is that these are expected to cost around $20/ton freight, whereas Capes cost close to $29/ton. This makes one wonder if the Capes will be "marginalised" out of the market.
In a world with price-driven demand promoting economies of scale, it looks like more and more owners are going "big", and proof of that is that the order book contains 166 dry cargo vessels larger than 200,000dwt, 74 of which are over 280,000dwt.
So will owners follow the markets and go "big", or will they look left when everyone is looking right?
Best Regards,
Theo Scholiadis - S&P Broker
http://shipping-markets.blogspot.com/
http://shipping-markets.blogspot.com/
N. Cotzias Shipping
Main articles used (list not exhaustive):
[Source: TradeWinds] [Date: 18/11/2010]
[Source: TradeWinds] [Date: 18/11/2010]
[Source: Bloomberg] [Date: 18/11/2010]
Monday, November 22, 2010
Shipping Markets: Dry Cargo Market “Highlights” - Week 46 (12/11/2010 - 19/11/2010)
Last week was “saved by the Panamaxes”, this week it was the Panamax sector that suffered the most. Increased volatility, greater fluctuations, and weekly or monthly periodicity of peaks and troughs have definitely altered the shipping markets. This was an overall negative week with all indices being red and most of the smaller indices producing long consecutive falling trends. For this coming week the BDI recorded its 17th consecutive drop, and it closed the week just like previous weeks with another strong loss of -7.3%. Capes may have found a bottom as the index mid-week marginally gained and this could be the possibility to start building on another rising period while Asian thermal Coal imports that will be needed to cover for the strong winter that is still ahead, may support the charter market showing some clear signs of new prompt and available cargoes.
Best Regards,
Sunday, November 21, 2010
The Show Must Go On!
Ahoy There!
Top & Bottom 5 Day: DRYS +1.85%, SB +0.1%, OCNF 0.0%>>>
NM -6.1%, FREE -9.5%, SHIP -12.29%. The 30 day chart for DRYS indicates a whopping 29.97% gain in share price. The movement was ~based on the rig contracts and that alone makes any pure dry bulk comparison about worthless. It is a new dry bulk world now with pure players becoming obsolete. The public fleets that drag anchor on this may well see the light house after colliding with the rocks. Ski admits he did not like it (mixed fleets) at first, but now concedes the owners (and their broker’s) do more research than some might acknowledge. The weeks laggards (NM,FREE,SHIP)took some lumps for sure!
The Baltic Numbers: BDI -6.4%, BCI -3.2%, BPI -12.76%, BSI -5.6%, BHSI -4.56%. The big ladies put up at least some fight, mean while the Panasisters rolled over and gave it away! The Handysize index drops below 800 for the lowest level seen in over a year. The 800 was mentioned at Boomer James insistence because of the associated bad Karma that flows through him when the most significant digit of any Baltic indice changes downward.
Dry Fixtures Thursday to Thursday: The week shows 110 fixtures comparing miserably with last weeks 158. Looks like over half the Ore Chores disappeared (wow) comparing 11 verses 28. Anyhow …Coal =9, Ore =11, Corn =1, T/C =84, Period =5. The Period fixtures also went "stealth mode" (not visible) dropping volume to single digits not seen since the 3rd week of July. The commercial distinctions were as follows. Capesize 23, Post Panamx = 0, Kmax =9, Pmax =41, Smax =24, Hmax =5, Hsize =5, Bulkers under 30K=3. Readers are reminded that Ski does not report on the commodity laden vessels fixed under T/C. That detailed maritime scoop requires readers to contact professional observers like our friends at NCSC and Commodore Research. It could be said that they maintain superior maritime domain awareness, and part-timers like myself will probably not match.
Familiar Vessels: Navios Hios, Navios Sagittarius (fix for PGSC must have failed) Genco Thunder, Navios Altair, Free Jupiter,.
Good FortunesSki
Saturday, November 20, 2010
weekly is delayed
Dry Bits Weekly
will try to post tomorrow in am, dad is having bad time with chemo (only his second day) and mom is a wreck. best 2 friends I had in over 50 years.
will try to post tomorrow in am, dad is having bad time with chemo (only his second day) and mom is a wreck. best 2 friends I had in over 50 years.
Friday, November 19, 2010
BDI Down Again
Ahoy There!
The BDI lost about (-1%) today with the Capes being flat (yet positive) while the other 3 commercial fleets led by the Pmax (-2.78%) again lost in unison. I think this would have made the last 17 sessions of the Baltic have at least one thing in common. Bummer!
With our intention of reporting on good news when and where any can be found Ski skips to a recent Reuters story quoting BIMCO President Lorenz-Meyer “There are too many shipyards. For the next couple of years, a number of them won’t be able to survive on their own” and he went on to say “there will be consolidation”. Let us hope! The last we heard Lloyd’s Register lists over two thousand shipyards in China alone.
We do not propose the idea to our readers that China will any time soon recognize that they may be shooting themselves in the foot. What they may accomplish with the not too discreet goal of “Maritime Domination” in mind, could come at a severe cost to the very fleet they wish to operate. If they continue to over produce vessels, the values of the vessels themselves come under pressure, and yes, nobody makes much money. Catch 22
Anyhow, the thought that a bunch of these yards will fail sounds like “Good News” at this point.
Good Fortunes
Ski
The BDI lost about (-1%) today with the Capes being flat (yet positive) while the other 3 commercial fleets led by the Pmax (-2.78%) again lost in unison. I think this would have made the last 17 sessions of the Baltic have at least one thing in common. Bummer!
With our intention of reporting on good news when and where any can be found Ski skips to a recent Reuters story quoting BIMCO President Lorenz-Meyer “There are too many shipyards. For the next couple of years, a number of them won’t be able to survive on their own” and he went on to say “there will be consolidation”. Let us hope! The last we heard Lloyd’s Register lists over two thousand shipyards in China alone.
We do not propose the idea to our readers that China will any time soon recognize that they may be shooting themselves in the foot. What they may accomplish with the not too discreet goal of “Maritime Domination” in mind, could come at a severe cost to the very fleet they wish to operate. If they continue to over produce vessels, the values of the vessels themselves come under pressure, and yes, nobody makes much money. Catch 22
Anyhow, the thought that a bunch of these yards will fail sounds like “Good News” at this point.
Good Fortunes
Ski
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