Märkte | Markets Global headwinds start blowing Container shipping and dry bulk markets are nervous about impact from US-China trade war. Period rates for container vessels are levelling off. By Michael Hollmann The introduction of tariffs on 50 bn $ worth of imports from China to the US, retaliatory measures by China on US goods and a likely further escalation are causing major jitters in the freight markets, especially for containers and dry cargo. The full impact on seaborne trade once the tariffs get imposed in early July is hard to predict. Trade volumes of the affected goods are unlikely to fall at the same rate as trade costs increase (+25% tariffs) as it is impossible to substitute all import products by domestic products. Also, certain goods and commodities will simply be sourced elsewhere from countries that remain »neutral« in the trade war. However, most analysts and economists seem to agree that the trade row will at least shave off some of the projected growth in seaborne trade this year. Paris-based Alphaliner already grasped the nettle, lowering its forecast for container throughput growth in the world’s ports from 5.3% to 4.5% this year. That would be significantly less than the forecast 5.8% in nominal fleet growth this year and thus compound the overcapacity situation which already forced a few liner operators to shut down some long-haul services. Freight rates in the transpacific trade (China-US) have already weakened lately although this is probably more due to general slot overcapacity than a harbinger of a trade slowdown due to tariffs. So far, trade growth has remained robust as borne out by the May reading of the RWI/ISL container handling index which surged to a new high of 136.6 points in May (original value not seasonally and working-day adjusted). CONTAINERSHIPS (PERIOD) TEU Name dwt Built Type Speed Cons. Charterer Laycan Period Rate ($) FEEDER / HANDY 657 Sandwig 8,015 2003 geared 17.5 27 Atlantic Feeder S. Jun 4–6 weeks Caribbean 7,750 698 Max Partner 8,300 2008 g’less 17.0 28.5 KMTC Jun 8–12 m Intra-Asia 5,300 868 Henneke Rambow 11,390 2007 g’less 18.0 33.3 MacAndrews Jun 8–12 m N.Europe / Morocco (ext) €6,800 1100 Magnus F 13,879 2006 g’less 18.5 44 Unifeeder Jun 4 m North Europe 7,650 1118 Iberian Express 13,760 2008 geared 19.6 39 OOCL Jun 4–6 m Intra-Asia 8,000 1368 Hooge 16,921 2006 geared 19.5 45 +2.2 Maersk / Seago Jun 2–4 m Cont / Baltic 9,250 1440 Cape Fulmar 20,250 2007 g’less 19.0 57.8 + 3.6 SM Line Jun 3–4 m Intra-Asia (ext) 10,900 1730 Polo 23,023 2002 geared 19.7 45 United Africa Feeder Jun 7–9 m PG / East Africa (ext) 10,950 1730 Nordpuma 23,673 2015 g’less 18.5 43.2 + 2.8 Panocean Jun 10–12 m Intra-Asia 14,150 1740 Hansa Drakenburg 23,456 2007 geared 21.0 64 + 3.5 MCC / Maersk Jun 3–5 m Intra-Asia 10,700 1756 Mount Cameron 23,673 2016 geared 18.5 43.2 +3.1 Sinokor Jun 10–12 m Intra-Asia (ext) 14,150 SUB-PANAMAX 2478 Devon Trader 25,369 2000 geared 22.5 86 Wan Hai Lines Jun 2–3 weeks Persian Gulf 12,500 2702 Lydia 37,950 2009 g’less 21.6 88 + 3.5 Evergreen Jul 4–5 m Intra-Asia (ext) 12,500 2826 Odysseus 39,418 2006 g’less 22.3 99 Hapag-Lloyd Jul 2–4 m Mediterranean (ext) 11,750 3430 Carlotta Star 40,018 2000 geared 22.1 106 CMA CGM Jul 12–14 m Med / WCSA (ext) 13,100 3500 Nordspring 46,269 2007 g’less 23.4 118.6 Hapag-Lloyd Jul 8–10 m PG / India (ext) 13,100 TRADITIONAL PANAMAX AND WIDEBEAM 4300 Rio Charleston 55,345 2008 g’less 24.2 144.5 CMA CGM Jul 8–10 m FEast / W. Africa (ext) 13,600 4957 Wieland 58,000 2014 g’less 22.0 99.5 RCL Jul 2–2.5 m Far East / PG (ext) 18,000 5085 Miami 68,463 2007 g’less 24.3 164.5 CMA CGM Jul 9–12 m Far East 13,950 5117 Octavia 66,160 2005 g’less 23.5 145 Zim Jul 9–12 m Med /Asia / WCNA (ext) 15,375 LARGE AND VERY LARGE 5570 Aegiali 66,573 2002 g’less 25.0 210 Hapag-Lloyd Jun 10–12 m N. Europe / UCES (ext) 16,500 6734 Agios Minas 79,456 2001 g’less 24.0 206 Wan Hai Lines Jun 12–14 m Far East / WCSA 19,000 8814 Northern Juvenile 94,419 2009 g’less 25.0 256 Evergreen Jul 8 m Far East / WCSA (ext) 18,750 BULK CARRIER (PERIOD) dwt Name Built Charterer Delivery Period Rate ($) CAPESIZE 181,044 Golden Savannah 2017 Glencore July/August China 11–13 m, redelivery worldwide 119% 5tc (index rate) 180,181 Mount Ophir 2004 Oldendorff 25.–30.06. Jingtang, China 7–9 m, redelivey worldwide 21,000 PANAMAX / KAMSARMAX 82,641 Betty’s Dream 2008 Oldendorff 19.–24.06. China Japan Korea 5–8 m, redelivery worldwide 13,500 75,698 Kavo Paloma 2007 Klaveness 11.–12.06. Zhanjiang, China 3–5 m, redelivery worldwide 13,400 SUPRAMAX / HANDY 60,263 Golden Cathrine 2015 Western Bulk 22.–24.05. Lianyungang 4–7 m, redelivery worldwide 14,000 56,785 Ioannis Theo 2010 n.a. 11.06. Bukpyung, Korea 5–7 m, redelivery worldwide 12,000 Charter deals June / all information without guarantee 10 HANSA International Maritime Journal – 155. Jahrgang – 2018 – Nr. 7
Märkte | Markets Orders & Sales New Orders Container Newbuilding activity for boxships stayed active. Hyundai Merchant Marine will order 20 units. Daewoo and Samsung will build seven and five 23,000 TEU vessels to be delivered in 2020. Hyundai will deliver eight 14,000 TEU vessels in 2021. In the feeder segment, Pan Ocean placed an order for two 1,800 TEU ships at Hyundai Mipo, costing around 23 mill $ each, to be delivered in late 2019. Furthermore, Wuhan Container Shipping, A decline in traffic growth as from July would seriously harm ocean carriers’ efforts to restore freight rates which are lagging expectations this year. Rate levels picked up at the start of June as general rate increases and emergency bunker surcharges took effect. However, they quickly eroded in the following weeks. Major financial losses could be looming for container lines if the price situation does not improve. Route capacities would have to be slashed and charter vessels returned to their owners, undermining hire rates and earnings levels for tramp vessels. Fortunately for shipowners, tonnage availability in the charter market has been very tight for many months so rate levels will not fall over a cliff if gradually more ships are coming into prompt positions. Last month still saw modest improvements in charter rates especially for panamax and traditional post-panamax vessels. The New ConTex increased by 2.4%. However, as from early/mid June brokers noticed more downward pressure on rates in certain sectors, especially in the smaller feeder classes below 2,000 TEU which have seen a rebound in idle ships to 70 units – 60 of them tramp-owned, according to Alphaliner’s latest count. Of note, the gearless 2,700/2,800 TEU segment, which had been of the strongest sectors throughout the last 12 months, also registered growing headwinds. London broker Howe Robinson marked period rates for 2,800 TEU vessels down by 2.4% on 20 June. In the feeder sectors, fixing activity continued to ease off in all major markets, particularly in North Europe where Maersk/Seago reportedly redelivered a number of ships as it phases in its own new 3,600 TEU feeder vessels. a regional Yangtze river player, is said to have ordered two 1,100 TEU at Ezhou Guangda. Secondhand Sales Container S&P activity increased. Compared to the last reporting period, buyers are now willing to match owners firmer asking prices. In total we recorded nineteen transactions including seven en bloc deals. One noticeable transaction was done between CMB and Norway`s Ocean Yield. Four 3,800 TEU vessels were sold at a package price of 120 mill. $, based on a 12-year bareboat charter back to CMB. Further, the 2007 built »Buxharmony« with a capacity of 2,702 TEU. The ship was acquired via an online auction for a firm price of 14.25 mill. $. Demolition Sales Scrapping activity remained low – only two vessels were sold. Currently one container vessel`s light displacement ton quotes at around 450 $ on the Indian sub-continent, while in Turkey and China a ton of container scrap steel worth approximately 280 $. Jan Göldner Geared 1,100 TEU vessels in Asia have been struggling as well lately, trying to prevent rate levels from slipping below 8,000 $/day. With the summer holiday season approaching, the prospect of a recovery in the short term looks slim. Shipowners so far expected momentum to pick up after the summer break, it remains to be seen whether the trade war will thwart a post-summer upturn. In the dry cargo market, capesize and panamax rates staged a bit of an unexpected rally in the first half of June driven to a large extent by additional cargoes and tonnage shortages in the Atlantic, however the market has been softening since then. China’s retaliatory tariffs against US goods are concentrated on agricultural products such as soybeans, corn and wheat which represent a major business especially for supramax and for panamax bulk carriers. In particular, a decline in the 33 million t soybean trade per annum could prove painful for shipowners. The question is whether Chinese buyers will simply reduce purchasing volumes and star destocking their supplies or whether they will shift sourcing to other markets such as Brazil if enough export volume is available there. For the smaller geared bulkers – supramaxes and handies – the 25% tariffs on steels and aluminium into the US since 1 June pose an additional threat. US Census Bureau data shows that US steel imports fell sharply to 2.7 mill. t already in May, from 3.4 mill. t in April. According to London shipbroker SSY, a slowdown in steel volumes was the main factor that caused supramax spot earnings on the Europe-US route to drop below 7,000 $/day for the first time since February. n COMPASS CONTAINER SHIP T/C MARKET 550 500 450 400 Month on Month534 +2.7 % CONTAINER FREIGHT MARKET WCI Shanghai-Rotterdam 1,601 $/FEU + 10.4 % WCI Shanghai-Los Angeles 1,282 $/FEU - 5.6 % DRY CARGO / BULK TANKERS Average rates spot/up to 4 weeks validity WCI = World Container Index, supplier: Drewry Baltic Dry Index 1,373 + 18.2 % Spot time charter averages ($/day) Capesize 5TC average 16,862 + 29.1 % Panamax 4TC average 11,409 + 15.7 % Supramax 6TC average 11,864 + 3.4 % Handysize 6TC average 8,643 0 % Forward / ffa front month Jul ($/day) Capesize 180k 16,220 + 19.3 % Panamax 11,430 + 7.7 % MPP 23.01.18 Baltic Dirty Tanker Index 743 - 0.5 % Baltic Clean Tanker Index 506 - 5.5 % SHORTSEA / COASTER 21.06.18 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. 2,600 €/d - 3.7 % HC Shortsea Index 16.96 - 5.5 % ISTFIX Shortsea Index 661 - 11.5 % 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 21.06.2018, Alterations within four weeks HANSA International Maritime Journal – 155. Jahrgang – 2018 – Nr. 7 11
