Märkte | Markets Markets missing momentum Hire rates for container vessels stabilizing but no autumn rally yet. Dry cargo sector gradually recovering from heavy falls, writes Michael Hollmann Liner operators have returned to the container ship charter market after the summer holidays, with weekly fixture lists lengthening again. However, demand has not been sufficient to send charter rates back up again, barring a very small recovery for certain sizes and designs. Rate levels across the major segments from 4,250 TEU to 1,100 TEU slipped another 1.8% over the past weeks which is far less than in the previous period with a fall of 4.6%. The most challenging segments from shipowners’ perspective are the large gearless sectors over 5,500 TEU and the handy/feeder range of 1,000-2,000 TEU, which both continue suffering from rather anaemic demand. Fixing levels for traditional »post-panamax« vessels have consolidated in the 12,000-14,000 $/dayrange – far below the peak levels of more than 20,000 $ that got fixed during the busy spring season. Spot time charter earnings for them are thus only slightly higher – if at all – than for classic panamax types of 4,250-5,100 TEU. Broker reports say that spot/prompt tonnage availability kept going up especially for 5,500-7,500 TEUs, with around a dozen units in search of immediate employment in mid-September. The lack of opportunities in typical long-haul trades for large gearless vessels results from an ongoing rationalisation of liner capacity, beginning with the transpacific trade and later spreading to the Australia, Middle East and to the FarEast-Europe trades. Recent moves include the early termination of a FE/E loop by the 2M carriers, the closure of a FE/Middle East loop by Gold Star Line, KMTC and others and the merger of two Med/US services by the Ocean and THE Alliances. Although not all these restructurings do immediately result in redeliveries of vessels, they provide the respective carriers with significant spare capacity for which they need to find alternative use before chartering in more ships. The impact on the market will thus be delayed. In fact, some of the early corrections announced for the transpacific trade already over the past months are just starting to impinge on the market now following the final sailings. The problem is that the clock is ticking against tramp owners, with the Golden Week in China approaching fast. Most of the merchandise for the large import markets in Europe and the US (Xmas) gets shipped before Golden Week which generally marks the end of the cargo peak season. Containerships (Period) TEU Name dwt Built Type Speed Cons. Charterer Laycan Period Rate ($) Feeder / Handy 925 Contship Joy 12,611 2007 gearless 18.5 39.5 Seaconsortium Sep 6-10 months Intra-Med (ext) 6,500 1012 Nobility 12,754 2012 geared 17.5 27 Hapag-Lloyd Sep 3-7 months Intra-Asia (ext) 8,550 1102 Boston Trader 12,930 2004 geared 20.0 43 CNAN Sep 5-7 months Intra-Med 6,900 1118 Mito Strait 13,760 2006 gearless 19.0 38.5 Unifeeder Sep 7-9 months North Europe (ext) 6,400 1739 Gdansk Trader 23,021 1999 geared 19.6 54.5 Yang Ming Line Sep 1-3 months Intra-Asia (ext) 9,500 1740 Hansa Magdeburg 23,454 2003 geared 20.0 70 SITC Sep 1-3 months Intra-Asia 10,100 1849 Cafer Dede 26,811 2008 gearless 19.5 59 Cosco Sep 7-9 months Intra-Med 10,100 Sub-Panamax 2345 Mimmi Schulte 30,205 2017 geared 18.0 40 Africa Express Line Sep 10-12 months Europe / WAF (ext) 15,000 2496 E. R. Elsfleth 33,800 2003 geared 22.1 87 MSC Oct 6-9 months Intra-Med (ext) 10,900 2824 Odysseus 39,420 2006 gearless 23.0 97 Hapag-Lloyd Sep 4-6 months Intra-Med (ext) 11,300 3820 Vil Dardanelles 51,759 2013 gearless 20.3 100 Maersk Oct 9-12 months Far East 13,300 Traditional Panamax and Widebeam 4132 JPO Capricornus 52,863 2005 gearless 25.0 160 Hamburg Süd Sep 6-9 months Far East 12,800 4563 CPO Baltimore 51,699 2009 gearless 24.0 130 Cosco Sep 5-7 months Med / North America (ext) 12,900 4957 Wiking 57,500 2016 gearless 21.0 100 KMTC Sep 5-7 months Far East net 15,500 5042 Shanghai Trader 67,255 2005 gearless 25.0 165.2 Wan Hai Lines Sep 2-4 months Far East (ext) 12,300 Traditional Panamax and Widebeam 6612 Cardiff 80,551 2014 gearless 21.0 Maersk Sep 40-80 days Far East 12,500 8533 SM Charleston 101,570 2005 gearless 25.3 250 MSC Sep 6-8 months Far East 12,500 8533 Seamax Stratford 101,496 2006 gearless 25.3 250 Regional Container Lines Sep 6-8 months Intra-Asia 14,100 Bulk carrier (Period) dwt Name Built Charterer Delivery Period Rate ($) Capesize 176,320 Alpha Confidence 2011 Cofco Bayuquan 19.-21.09. 2 years, redelivery worldwide 21,250 176,193 Lowlands Orchid 2005 Oldendorff China prompt 4-6 months, redelivery worldwide 25,250 Panamax / Kamsarmax 81,662 Odysseas I 2013 Sinoeast Singapore prompt mid-September 5-8 months, redelivery worldwide 14,000 74133 Africa Graeca 2002 Ausca Singapore prompt mid-September 4-7 months, redelivery worldwide 12,500 Supramax / Handy 63,310 GH Rough Habit 2012 n.a. Lianyungang spot 4-7 months, redelivery worldwide 13,450 32,377 Yangtze Happiness 2012 n.a. Iskenderun 21.09. 4-6 months, redelivery Atlantic 10,250 Charter deals September / all information without guarantee 10HANSA International Maritime Journal – 155. Jahrgang – 2018 – Nr. 10
Orders & Sales New Orders Container Again, interest in containership newbuilding activity was focused on the feeder segment. Additional information regarding the Evergreen and Wan Hai orders on which we had reported were announced. Evergreen will be chartering up to 24 of the 1,800 TEU newbuildings from Shoei Kisen, Pacific Ship Management and Mitsui. Shoei Kisen will provide 16 vessels, to be built at sister company Imabari. Mitsui assured 6 units, which will come from HMD, while Pacific will provide 2 vessels, to be constructed at Yangzijiang. Wan Hai ordered six 1,900 TEU vessels plus two options at JMU, while Huangpu Wenchong will build four firm ships plus two options. Huanghai ordered eight 2,800 TEU ships, with two consecutive options. The vessels will be built at JMU. Secondhand Sales Container The activity in the S&P market increased. The biggest container vessels sold were three 10,600 TEU ships, picked up by Ship Finance International. Built in 2015, they were acquired in combination with long term time charters to Maersk, running for a period of between 6 and 10 years. In the feeder segment, Arkas Line purchased the 2011 built »Reecon Whale« and »Reecon Emre«. The 1,022-TEU-ships were acquired for 13,5 mill. $. Demolition Sales The pace of demolition was subdued during this reporting period. On the Indian sub-continent, the 1992 built feeder »Esm Cremona« was sold for 447 $ per ldt. Jan Göldner By contrast, classic panamax ships have proven relatively immune against a downturn so far. A continued flow of fixtures and extensions served to keep tonnage supply reasonably tight at less than 10 spot units. Rates are stable at over 12,000 $ in Asia so far and a couple thousands more in the Atlantic where tonnage availability is the tightest. It remains to be seen whether the combination of two transatlantic strings by the Ocean and THE Alliances may change the picture. Below 4,000 TEU, trading conditions in the charter market are more varied and tonnage demand pretty selective. The niche segment of 3,300-3,800 TEU continues to see fairly stable levels between 12,000 and 13,300 $. Although enquiry is reported to have waned a bit, very low availability of ships is offering protection against a deterioration. Meanwhile, the 2,500-2,800 TEU classes enjoyed fairly healthy demand again as interest picked up after the holidays. Spot supply remains tight for the main classes of 2,700 TEU (g’less) and 2,500 TEU (geared). The New ConTex shows rates for 2,700 TEU types gaining more strength again following a rash of fixtures especially in the Atlantic, with 24 and 12 month durations assessed at around 12,200 and 11,350 and rising as per 20 September. There are still a few spot ships left in Asia but this could go down to zero again if the latest momentum is maintained, brokers said. There is less optimism among owners of feeder ships with intakes below 2,000 TEU, with demand reported to be very slow across the board. Alphaliner counted 16 open positions in the 1,500- 1,900 TEU segment in mid-September, evenly split between the Atlantic and Asia. The Golden Week holidays do not bode well while a number of Intra-Asia services are reportedly getting restructured, possibly resulting in more redeliveries of ships in the coming weeks. Yet, rate developments were positive in some areas over the past weeks, highlighted by a recovery in levels to over 10,000 $ for Wenchong 1,700 TEU types in Asia. Smaller feeder vessels of 1,100 TEU and below continue to be confronted with low demand, keeping rates for CV1100’s at low 7,000’s $ and low 6,000’s $ in Asia and the Med, respectively. Due to schedule disruptions caused by typhoons in the Far East, brokers have seen an influx of short term requirements for extra tonnage which offers some stability to rates. COMPASS CONTAINER SHIP T/C MARKET CONTAINER FREIGHT MARKET Märkte | Markets Month on Month 486 - 1.8 % WCI Shanghai-Rotterdam 1,555 $/FEU - 13.0 % WCI Shanghai-Los Angeles 2,382 $/FEU + 9.2 % Average rates spot/up to 4 weeks validity WCI = World Container Index, supplier: Drewry DRY CARGO / BULK Baltic Dry Index 1396 - 18.5 % Spot time charter averages ($/day) Capesize 5TC average 15,827 - 34.2 % Panamax 4TC average 12,499 - 2.9 % Supramax 6TC average 12,942 + 7.6 % Handysize 6TC average 8,913 + 12.1 % Dry cargo market suffers Forward / ffa front month Oct ’18 ($/day) The dry cargo market suffered quite a steep fall since the middle of August, reflecting unexpected weakness in the capesize segment where spot time charter Capesize 180k Panamax MPP 20.942 12,429 - 11.0 % - 2.2 % averages fell by around one third. TMI The troubles result from another lull in Toepfer’s Multipurpose Index iron ore chartering activity ex Brazil although September ’18 steel production in China conti- $ 7,385 nued to expand at a fast pace, according to latest available figures. Period activity and FFA rates still reflect optimism for the fourth quarter which is usually September ‘17 $ 6,314 the busiest for spot capesize chartering. Cargoes for China are expected to pick The index is based on a 12,500 tdw MPP/HL »F-Type« vessel up again boosting rates, given the relatively low stock levels in the ports there from operators, owners and brokers. for a 6-12 months TC and represents the monthly assessment (147.1 mill. t, according to SSY). For panamaxes and especially the smaller geared types, the trend has been more positive, with a rise in coals and minerals business for panamaxes in the Pacific and good demand for handy TANKERS Baltic Dirty Tanker Index Baltic Clean Tanker Index SHORTSEA / COASTER 773 499 - 2.6% + 4.0% bulkers in South America and the US Norbroker 3,500 dwt earnings est. 2,350 €/d + 12 % Gulf underpinning rates. HC Shortsea Index 15.91 - 1.0 % Time charter rates for multipurpose/ heavy lift ships continued to recover as ISTFIX Shortsea Index 548 - 9.5 % well, with the Toepfer Multipurpose Index for 12,500 dwt F-type vessels reach- tracking spot freights on 5 intra-European routes; Istfix Norbroker: spot t/c equivalent assessment basis round voyage North Sea/Baltic; HC Shipping & Chartering index ing a year-to-date high of 7,385 $/day for Istanbul Freight Index covering spot freight ex Black Sea September. n Data per 20.09.2018, Alterations within four weeks 550 525 500 475 450 19.04.18 20.09.18 HANSA International Maritime Journal – 155. Jahrgang – 2018 – Nr. 10 11
