Märkte | Markets Charter rate rally wearing off The container ship market has seen a remarkable upturn. Now shipowners have to dig in their heels to hold on to the gains, writes Michael Hollmann Following the rapid advance of container ship charter rates during March and April, the market is now lacking the necessary momentum to scale further heights. In the largest gearless sectors, period fixtures have lately been stable but anxiousness is increasing as rumours abound of tonnage getting fixed at levels considerably below last done. Meanwhile in the panamax segment, shipowners are already on the backfoot, with major charterers succeeding in pushing rates for baby-panamax ships below 9,000 $/day. By contrast, the sub-panamax sectors of 2,500-2800 TEU have managed to maintain rate levels at 10,000 $/day while rates for handy and feeder types below 2,000 TEU are finally catching up a bit. The overall steadier tone in the market is illustrated by a relatively meagre 3.3% increase in the New ConTex that tracks trading in the 1,100-4,250 TEU sectors. By comparison, April saw an 17.0% and March an 11.5% rise. Generally, global container trade looks in a much better shape compared with last year, as borne out by growth estimates of +10% for global traffc during the first quarter (CTS statistics) and of +5.2% in the all-important Far East/Europe headhaul trade (westbound). Container lines commissioned newbuildings and on top of that had to bring in considerably more charter tonnage to cater for cargo growth. In addition, they had to add further tonnage to bridge gaps in their vessel networks during the transition to the new alliances as per 1 April (Ocean, THE). The combined effect led to an impressive fall in the global idle container ship fleet to just 602,000 TEU – some 820,000 TEU less than at the beginning of the year. The signs are, though, that the liner networks are nearly saturated with ships. Yes, peak season cargo demand may continue to build up. However, the recent stagnation in freight rates and large-scale failure of general rate increases in April and March suggests that charterers have to take a more measured approach to capacity planning in order to lift freight rates to more sustainable levels. Remember, the first quarter saw a number of TEU Name dwt Built Type Speed Cons. Charterer Laycan Period Rate ($) FEEDER / HANDY 704 Contship Box 8200 2008 g’less 17.0 Hyundai Merchant Marine Apr 2-8 months Intra Asia _4200 966 Hoheriff 11500 2007 geared 18.8 Dole Apr 21-42 days Caribbean _7250 1036 WES Janine 13200 2012 g’less 18.5 Sea Consortium Apr 1-3 months Cont / Baltic € 6.300 1118 Vega Azurit 13760 2008 geared 19.6 Seago Apr 1-4 months Cont / Baltic _5900 1147 Asiatic Neptune 12690 2007 g’less 19.0 KMTC Apr 4-6 months Intra-Asia _7250 1421 Charlotta B 17822 2009 g’less 19.3 Hapag-Lloyd Apr 11-13 months North Europe 9250 1705 San Pedro 21737 2014 geared 19.7 Heung-A Apr 4-6 months Intra-Asia (ext) _8500 1732 RHL Audacia 23600 2007 geared 21.0 64 + 6 MCC / Maersk Apr 2-4 weeks Intra-Asia 7000 1740 EM Hydra 23400 2005 geared 19.5 62 + 3 Gold Star Line/ Zim Apr 4-7 months Intra-Asia 7200 1900 Pacific Star 26260 1997 geared 19.0 K Line Apr 7 days Far East 6300 1924 Delphis Gdansk 24700 2017 g’less 18.5 FESCO Apr 6 months Cont / Baltic 10500 SUB-PANAMAX 2450 Arica Bridge 32997 2010 geared 22.2 KMTC May 5-7 months Intra-Asia 9300 2472 Leda Trader 33917 2000 geared 22.0 Sinokor May 4-6 months Intra-Asia (ext) 9300 2500 Nordamelia 35500 2017 geared 19.0 Hamburg Süd May 5-7 months Pacific (relet by Seatrade) 11400 2732 Euro Max 39307 2002 g’less 21.6 85.5 Bengal Tiger Line May 14-42 days Southeast Asia 9300 2824 Irenes Remedy 39382 2005 g’less 24.0 Hapag-Lloyd May 5-7 months transatlantic 8850 2824 AS Carinthia 39386 2003 g’less 24.0 Simatech May 4-7 months Indian Ocean trade (ext) 9500 3388 Natal 43127 2007 g’less 22.4 Regional Container Lines May 4-6 months Intra-Asia (ext9 9550 3534 Northern Dexterity 42166 2008 g’less 22.2 Hapag-Lloyd May 70-90 days Intra-Asia 9500 TRADITIONAL PANAMAX AND WIDEBEAM 4132 Duck Hunter 55495 2004 g’less 24.0 Wan Hai May 40-50 days Far East (ext) 10600 4178 Amalthea 52788 2009 g’less 24.6 K Line May 1 round voyage FE / SAF (ext) 10000 4398 Corinthiakos 55400 2010 g’less 25.2 Hapag-Lloyd May 5-7 months Far East / India (ext) 10000 4600 Northern Priority 59186 2009 g’less 24.0 Mitsui OSK Lines May 2-4 months Intra-Asia 11500 5294 Barbara 65550 2010 g’less 25.0 181 Maersk Apr 2-3 months transatlantic (ext) 13000 5294 Blandine 65550 2009 g’less 25.0 181 Cosco May 5 months transatlantic 13000 LARGE AND VERY LARGE 5551 Rio Barrow 68142 2001 g’less 25.9 198 Hapag-Lloyd May 10-14 months N. Europe / ECSA (ext) 12500 5990 E.R. Denmark 68176 2002 g’less 26.0 Hapag-Lloyd May 30-40 days N. Europe / China 10000 6492 K Phoenix 80270 2003 g’less 25.0 225 CMA CGM May 11-14 months Asia / SAF/ WAF 12900 6881 Kristina 80277 2013 g’less 22.5 Wan Hai May 11-13 months transpac / high reefer 18500 7241 Anton Schulte 90651 2009 g’less 25.0 220 NYK Line May 10-12 months Far East / India (ext) 15000 7471 Conti Savannah 93542 2005 g’less 25.8 268 + 10 Hapag-Lloyd May 5-7 months worldwide 19850 Charter deals May / all information without guarantee 12 HANSA International Maritime Journal – 154. Jahrgang – 2017 – Nr. 6
Märkte | Markets New Orders Container New building activity remained calm. Only one Jones Act-compliant order became apparent. Pasha Hawaii ordered two 2,500 TEU vessels at Texan shipyard Keppel AmFELS. The Hawaii-based ordering party has an option on the construction of two additional units of the LNG-powered container ships. Currently quite a few ordering parties are attempting to postpone new building deliveries. On the other hand ship yards are eager to contract new orders. However, despite recent charter market improvements, rates are still too low for new building projects to become economically viable – especially for larger tonnage. Secondhand Sales Container During February seven-yearold 4,250 TEU vessel Barbados was reportedly sold for 6.5 mill. $. However, this sale did not materialize because sellers did not lift their subjects. Now the vessel has been sold to Turkish interest at around 9.5 mill. $. Admittedly price increases in the panamax segment were especially vigorous. Nevertheless, this example displays the change of sentiment the secondhand market experienced in the course of the last three months. Notwithstanding the rising price level, bustle at the second hand market for further trading container ships stayed high. Rising charter rates have tempted some speculative buyers to enter the market. This catalyzed demand. Demolition Sales Container Charter market improvement is taking its toll. Since the acceleration of the charter rate recovery in March, recycling activity has declined. While there are still sales to be reported, activity has more than halved compared to January/February. Price level has slightly decreased. In mid-May it oscillated around 350 $ per light displacement ton for delivery at the Indian-subcontinent. Andreas Mietzner COMPASS CONTAINER SHIP T/C MARKET 400 360 320 280 20.12.16 CONTAINER FREIGHT MARKET 18.05.17 Month on Month 410 +3.3 % WCI Shanghai-Rotterdam 1,811 $/FEU + 17.1 % WCI Shanghai-Los Angeles 1,407 $/FEU + 3.6 % Average rates spot/up to 4 weeks validity WCI = World Container Index, supplier: Drewry major carriers posting net losses or even operating loss, and cost pressures are bound to increase – think of the firmer trend in crude and bunker fuel prices ... Lists of fixtures in the very large and large gearless sectors shortened quite a bit over the past weeks, although this could also be explained by reduced availability of tonnage after the recent fixing spree. On the other hand, prompt tonnage lists 1-2 months forward are lengthening, according to brokers, without sparking much forward fixing activity. Very large modern vessels still commanded very firm levels, with Hapag-Lloyd reportedly paying 33,000 $/day for the 2011-built 9,954 TEU »Athenian« in a 4-6 month period for transpacific trading. By contrast, latest fixtures for standard 6,000 TEU ships at 13,500 to 14,100 $/day showed a sideways movement or even slight decline on last done. The same can be said about wide-beam »panamax« units, with the 4,896 TEU »Hammonia Sapphire« achieving a steadyish 13,000 $/day for a 12 month period with Cosco in Asia. Panamax back to reality? In the panamax sector, charterers appear to have gained the upper hand again, forcing rates levels down from 10,000- 10,500 $/day into the range from mid 8000`s to low 9,000’s $/day. Baby-panamax types were the first cave in, followed one or two weeks later by panamax-max types. However, certain positions still earn a considerable premium, like in the Atlantic where the supply of larger vessels is much tighter. Looking further ahead, a common problem for post-panamax and for panamax tramp ships might be the cascading of very large and ultra-large liner ships from the Asia-Europe into other trades such as Far East/Middle East, transpacific or Asia/Mediterranean. Speaking at the Global Liner conference in Hamburg, Drewry analyst Neil Dekker warned that 68 vessels of 13,500-16,000 TEU may have to be redeployed outside Far East/ Europe over the coming two years due to the influx of 18,000-21,000 TEU newbuildings. The knock-on effects could see many traditional post-panamax ships displaced out of their employments. The sub-panamax classes of 3,500 TEU, gearless 2,700-2,800 TEU and geared 2,500 TEU gained further small improvements over the past weeks, with fixtures surpassing 10,000 $/day. Rate levels are expected to remain firm at least in the coming weeks. Below 2,000, there have been some improvements for geared 1,700 TEU types both in Asia and the Mediterranean, with Wenchong 1700 types getting fixed at 7,500 $/day. Older B170 types finally enjoyed an uplift to mid 6,000’s $/ day in Asia. Very modern effcient designs such as the Topaz and SPP 1700’s also obtained smaller increases, highlighted by the extension of the gearless 1,700 TEU »Nordlion« at 9,150 $/day for 8-10 months by Samudera and the fixture of the geared 1,756 TEU »Seamaster« at 9,250 $/day by Simatech. M DRY CARGO / BULK Baltic Dry Index 957 - 23.0 % Spot time charter averages ($/day) Capesize 5TC average 12,018 - 18.0 % Panamax 4TC average 7,192 - 42.2 % Supramax 6TC average 8,696 - 13.9 % Handysize 6TC average 7,294 - 13.0 % Forward / ffa front month April ($/day) Capesize 180k 14,300 - 5.3 % Panamax 7,280 - 36.4 % MPP April ´17 $ 6,160 TANKERS TMI Toepfer's Multipurpose Index Baltic Dirty Tanker Index 757 - 7.6 % Baltic Clean Tanker Index 523 - 18.7 % SHORTSEA / COASTER May ´17 $ 6,163 The index is based on a 12,500 tdw MPP/HL »F-Type« vessel for a 6-12 months TC and represents the monthly assessment from operators, owners and brokers. Norbroker 3,500 dwt earnings est. 2,550 €/d - 2.0 % HC Shortsea Index 16.15 - 4.5 % ISTFIX Shortsea Index 594 - 2.0 % Norbroker: spot t/c equivalent assessment basis round voyage North Sea/Baltic; HC Shipping & Chartering index tracking spot freights on 5 intra-European routes; Istfix Istanbul Freight Index covering spot freight ex Black Sea Data per 20.04.2017, Alterations within four weeks .400 .200 .000 .800 .600 .400 .200 .000 .800 HANSA International Maritime Journal – 154. Jahrgang – 2017 – Nr. 6 13
