Märkte | Markets Chartering peak season fails expectations Rate levels for most liquid segments below panamax are still far below last year. Large gearless tonnage is still in high demand, writes Michael Hollmann Frustration among tramp owners and managers of container vessels is growing as this year’s second quarter heralds only meagre improvements to charter rates for all kinds of size classes expect the largest gearless vessels. The New ConTex which covers hire rates for 1,100- 4,250 TEU vessels posted only a minor increase of 1.0% over the past 4 weeks. This time last year, the same market sector was recording month-on-month increases in the mid-to-high single digits. The firmer trend over the past 2 months was by far not enough to catch up on the losses sustained during the second half od 2018. The result is that average rates for ConTex-type vessels keep hovering 20-25% lower than 12 months ago with little variation. As things stand, spot charter earnings are covering operating costs and a few thousand dollars more which may be fine for older, debt-free vessels. Earnings are not sustainable at all, though, for newly delivered vessels, employed in the spot market. According to chartering brokers, tonnage demand cooled off a bit since Easter for some of the smaller sectors below 4,000 TEU, albeit for no apparent reason. Geared 1,700 TEU ships which made continuous headway over the past weeks, pushing rates for standard Wenchong types to over 8,000 $ per day in Asia, are now facing problems taking rates to the next higher level. »The last 2 weeks were rather quiet, with a few ships lying spot and waiting for their next employment and a couple of eco designs potentially coming open soon, too,« noted one German broker in a market round-up for his principals. Alphaliner reported a rise in spot vessels in the 1,500-1,999 TEU sector from 5 to 8 between end of April and early May. Demand for gearless 2,700 TEU ships in Asia seems to have slowed a bit as well, with rates for the popular Aker/Baltic type vessels steadying in the low $ 9,000’s lately. Sluggish demand was also reported for 1,300 TEU ships and for the smallest feeders of 1,000 TEU and smaller. One particular type bucking the trend, however, was the modern SDARI 2100/2200 (2,200/2,300 TEU geared) which suddenly saw all idle vessels hoovered up by liner operators. Fixing levels firmed up slightly to 10,750 $/day (SDARI 2100). The favourable speed/consumption ratio of this type is likely to have gained greater attention again following the bunker price increases earlier this year. The market fundamentals have turned more sour over the past weeks, as the escalating trade war between the US and China could spell a reduction in trade volumes in the key transpacific trade. On the other hand, there is still hope that the growing impact of the 0.5% sulphur cap (»IMO 2020«) could come to the rescue of shipowners in the coming months. Tank cleaning operations and scrubber retrofits could cause tonnage shortages if analyst predictions of a temporary withdrawal of up to 6% of vessel capacity due to retrofits in the second quarter come true. The looming fuel price hike associated with the switch to 0.5% low-sulphur grades is already considered to be major driver for the rate boom for post-panamax tonnage. Contrary to the smaller size classes, ships of 6,000 TEU and larger enjoyed further substantial increases over the past month. Standard 8,500 TEU ships, for example, are reported to be assessed at 26,500 $ per day versus 24,000 $ some weeks ago. Older 6,000 TEU and wide-beam 6,800 TEU vessels registered similar increases. This has been driven by operational consolidation of services in a bid to exlpoit greater fuel efficiencies. One major broker pointed out that there have been several upgrades of vessel loops »to the effect of utilizing the largest possible vessels.« There are still open requirements by liner operators amid very tight tonnage supply, hence rates for post-panamaxes could see further improvements over the coming weeks. Already, fixing levels for 8,000-9,000 TEU ships are a few thousand dollars higher then during last year’s peak in the second quarter. n Ab sofort gilt auch für unser exklusives Angebot zu »Raten, Preisen, Indizes«: In unserem neuen Portal HANSA+ vereinen wir eine umfangreiche Übersicht über alle wichtigen Kennzahlen der Schifffahrtsmärkte. Sichern Sie sich den Zugriff auf Fracht- und Charterraten in der Container-, Bulk- und Tankschifffahrt, Bunkerpreise, MPP-, Shortsea- und Umschlagindizes, Ölpreise und vieles mehr … Erfahren Sie mehr über alle Optionen jederzeit unter www.hansa-online.de. 8 HANSA International Maritime Journal 06 | 2019
Märkte | Markets Orders & Sales New Orders Container The situation on the new building market remains unchanged. No orders were placed during this reporting period. The increased level of uncertainty regarding the freight market, as well as the tighter finance conditions continues to derail interest for fresh orders. Secondhand Sales Container Activity on the 2 nd hand market picked up compared to the previous reporting period. In total we recorded eleven transactions including three en bloc deals. The ratio of vended panamax vessels was particularly high. Sinokor purchased »Venice Bridge« (4,738 TEU, 2005 Korea built), »Astoria Bridge« (4,228 TEU, 2009 Korea built), »Baltimore Bridge« (4,432 TEU, 2010 built) and »Athens Bridge« (4,228 TEU, 2009 Korea built) en bloc. A further deal encompassed two 2012-built 13,100 TEU boxships. US-based investment firm En Trust Global paid a combined 150 mill. $. for both ships. In the feeder segment, Borealis sold the 2003 built »Puccini« to Dubai`s Marshal Shipping. The 2,496 TEU vessel was acquired for 7.1 mill. $. Demolition Sales The recycling markets saw some signs of slowing down. The monsoon and cyclone season, but also the Ramadan celebrations which started on May 5 th slowed down the pace of business activities. Nevertheless, demolition prices remained stable and oscillated between 405 $ and 478 $/ldt on the Indian-subcontinent. The highest price achieved the 2,526 TEU ship »Elafonisos«, which was sold for 478 $/ldt to India. Jan Göldner COMPASS Container ship t / c market 500 450 400 350 15.11.18 Container freight market 16.05.19 Month on Month402 • + 1.0 % WCI Shanghai-Rotterdam 1,493 $/FEU + 9.8 % WCI Shanghai-Los Angeles 1,419 $/FEU - 5.7 % Baltic Dry Index jumps over 1,000 points Appetite for large tonnage has also been the main driver in the dry bulk market of late, pushing the Baltic Dry Index up by more than one third to over 1,000 points for the first time since January 2019. The time charter average for big capesize carriers almost doubled over the past four weeks and the forward curve picked up as well, showing rate indications a few thousand dollars above spot for next month. The »capes« had previously hit rock bottom mainly because of a sharp slowdown in seaborne iron trades following the Brucutu mine disasters in Brazil and severe hurricane damage to iron ore ports in Australia. However, iron ore fixing activity ex Australia has now returned to more normal levels while fronthaul activity from the Atlantic to the Far East picked up as well. There is also continued period demand for tonnage at index-based levels (up to 24% above 5 tc). Of note, one older 180,000 dwt unit just agreed 15,500 $/day for one year, underlining renewed confidence among charterers. Panamaxes can also look back on a fairly successful month with a notable rise in spot earnings. According to broker reports, the grain export season on the East Coast of South America offered fair tail winds for owners. The outlook for this year’s export season was dampened by the outbreak of African swine fever in China where many millions of hogs are now getting culled. This could translate into a sharp fall in soya been imports given that the oil seed is mainly used for animal feed. However, there has been no major impact on freights so far. Instead the ECSA season also offered plenty of employment to supramaxes (52,000-58,000 dwt) which also notched up a 9% rise in spot earnings month-on-month. Most of the improvement is driven by the Pacific, though, particularly by a rise in minerals trades (ores, coal) ex Indonesia. n Dry cargo / Bulk Baltic Dry Index 1032 + 37.8 % Spot time charter averages ($/day) Capesize 5TC average 11,705 + 95.3 % Panamax 4TC average 10,023 + 12.0 % Supramax 6TC average 8,464 + 9.2 % Handysize 6TC average 5,728 - 3.7 % Forward / ffa front month Jun´19 ($/day) Capesize 180k 13,646 + 73.4 % Panamax 74k 9,967 + 4.9 % MPP May ’18 $ 7,247 TMI Toepfer’s Multipurpose Index May ’19 $ 7,524 12,500 tdw MPP/HL »F-Type« vessel for a 6-12 months TC Tankers Baltic Dirty Tanker Index 697 + 9.0 % Baltic Clean Tanker Index 504 - 12.7 % Shortsea / Coaster Norbroker 3,500 dwt earnings est. 2,250 €/d - 13.5 % HC Shortsea Index 16.57 - 4.1 % ISTFIX Shortsea Index 504 - 5.0 % 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 Bunkers IFO 380 Rotterdam $/t 411 +/- 0.0 % MGO Rotterdam $/t 611 + 3.5 % Forward / Swap price Q3 / 19 IFO 380 Rotterdam $/t 386 +/- 0.0 % Data per 16.05.2019, Alterations within four weeks HANSA International Maritime Journal 06 | 2019 9
