HANSA 10-2019

Märkte | Markets Rally

Märkte | Markets Rally spreads to smaller boxships The global container ship market remains tight on supply, with smaller vessel classes finally reaping benefits, too. By Michael Hollmann The turbulences in the world politics and economy show no signs of easing. Taking global purchasing manager indices as early indicators, economic activity continues to contract, not only in the Euro area but lately also in the US. Given the muted outlook for both markets, it is no surprise that liner shipping kept facing severe financial pressures during what should have been the busiest time of the year. Spot freight rates remained under pressure during the past month, illustrated by a severe erosion in prices on the Asia/Europe route and a decline also in the transpacific trade based on the World Container Index. Yet, the pains have not been bad enough to prompt liner operators to shed capacity, hence the tonnage situation in the charter market continues to be balanced or even very tight in the larger sectors. Therefore, charter rates maintained their positive trend, notwithstanding the gloomy world economic conditions. Looking at the New ConTex, average charter rates are up by 4.5% month-onmonth – the same increase as in the previous month. The dynamics have changed a bit, though, in that it is no longer only the panamax and post-panamax classes pushing the market up. The top performer of all ConTex-type classes right now is the gearless 3,500 TEU type with gains of around 11% and 15% on 24-month and 12-month periods – ahead of 4,250 TEU baby panamaxes which nudged up increases of 7.6% and 11.8%. Of note, the subpanamax classes of 2,700 TEU (gearless) and 2,500 TEU (geared) started to see meaningful improvements, with the thinning of tonnage supply finally reaching the smaller classes down to 2.000 TEU. Rates for these types are up by 4.5-9.5% monthon-month, now exceeding 10,000 $/day for standard types in Asia. »Scarcity of tonnage in whole Asia forces charterers to look at forward positions, with rates approaching the mid-10,000 $ benchmark for standard designs,« as one German broker commented on the gearless 2,800 TEU class. Back in August, ships in this class were still fixing at 0-1,000 less. Acccording to Alphaliner, worldwide spot availability of gearless tonnage in the 2,700-2,999 TEU range tightened from 8 to 4 units since end of July. Meanwhile, the ongoing lack of spot/ prompt vessels in the largest gearless segments drove period rates for panamaxes and post-panamaxes even higher yet. In unserem Portal HANSA+ vereinen wir eine Übersicht wichtiger Kennzahlen der Märkte. Sichern Sie sich den Zugriff auf Fracht- und Charterraten in der Container-, Bulk- und Tank schifffahrt, Bunkerpreise, MPP-, Shortsea- und Umschlagindizes, Ölpreise und vieles mehr … Erfahren Sie mehr über alle Optionen jederzeit unter www.hansa-online.de. Scrubber retrofits keep limiting the active fleet, ensuring full employment for all those ships available to the market. As a result, no spot ships have been recorded in the post-panamax segment for segments bigger than 4,500 TEU. Rate levels for standard 8,000-9,000 TEU tonnage moved higher from 30-32,000 $/d into the mid 30,000’s-range. Arguably, it was the niche segment of wide-beam tonnage with typical panamax container intake (4.600- 5,400 TEU) that posted the steepest gains. By the middle of September, brokers reported the extension of the 4,620 TEU »RHL Calliditas« at 23,000 $/d net for 12 months by Hapag-Lloyd. This represented a jump of circa 4,000 $/d from the previous benchmark fixture in this segment which was 19,250 $/d for an 8-10 month period on the sister vessel »RHL Concordia« by Cosco back in August. Dry cargo market remains strong The dry bulk market surged higher, with the Baltic Dry Index reaching its highest level for a long time in early September. The time charter averages (5 tc) for trips peaked at over 38,000 $/d for 180,000 dwt capesize vessels and at near 20,000 $/d for 82,500 dwt panamaxes, although they have retreated to circa 31,500 and 17,500 $/d, respectively, by the time of writing. In a month-on-month comparison, daily earnings for bulkers are still higher except for panamaxes. China continues to be the driving force, as the research desk of London broker Simpson Spence Young explained that dry bulk world trade should have reached record levels during the third quarter, spurred by increases in iron ore, coal and soyabean imports in China. »Volumes of iron ore, soybeans and grains out of Brazil were exceptionally good over the summer, driven by China building inventories and taking advantage of Brazil’s weak currency,« Clarkson Platou concurred. Smaller geared bulkers were delayed in joining the upswing, but spot earnings for them showed respectable gains over the past weeks, too. Supramaxes (58,000 dwt) registered a 6% improvement while the time charter average for smaller handies (28,000 dwt) even ticked up by more than 12%. These segments benefited from a spillover of panamax cargoes and generally firm conditions in the Atlantic on the back of strong grain business ex East Coast South America, Black Sea and US Gulf, brokers said. Finally, the shortsea dry and breakbulk market in Europe also started so a growing seasonal uplift thanks to growing grain export business in North Europe. According to sector analysts BMTI, typical Baltic westbound freights (to ARAG) for 3,000 t loads firmed up from 18 to almost 21 €/t since August. Meanwhile the market in the North Sea is buoyed by a rush in cargo activity ex UK, as BMTI reported. »With most UK wheat ships headed toward Spain, wheat charterers are racing to close up their requirements before the Brexit deadline,« it said. n 8 HANSA International Maritime Journal 10 | 2019

Orders & Sales New Orders Container Activity increased slightly. Evergreen, purchased six 23,000 TEU vessels at Samsung, fitted with scrubbers for delivery in 2022. Furthermore, the company ordered two 23,000 TEU vessels at Jiangnan and two units at Hudong Zhonghua. The price ranges between 140 and 160 mill. $ each. Oak Ship Management ordered two 1,900 TEU vessels at Naikai Zosen. TS Lines purchased up to four 2,700 TEU ships at Huangpu Wenchong. Secondhand Sales Container In light of improving charter rates activity increased slightly. While most of the transactions took place in the feeder segment, interest in the panamax sector increased. Feedertech purchased the 5,042 TEU »Pamina« for 9,1 mill. $, while Simatech acquired the »Grouse Hunter« (4,132 TEU) for 9 mill. $. In addition, the 2009 built 1,577 TEU »Stellar Windsor« was sold by Shoei Kisen to regional carrier SITC at approximately 8 mill. $. Demolition Sales Sentiment remained soft. Scrap prices on the Indian subcontinent continued to decrease as falling steel prices and weakening currencies maintained the negative price developments. The negative development was illustrated by the sale of two 1990 built 1,000 TEU ships: 5/ldt. JG Container ship t / c market 450 400 350 19.03.19 Container freight market WCI Shanghai-Rotterdam 1,303 $/FEU - 24.7 % WCI Shanghai-Los Angeles 1,391 $/FEU - 4.5 % Dry cargo / Bulk 19.09.19 Month on Month422 • + 4.5 % Baltic Dry Index 2192 + 3.5 % Spot time charter averages ($/day) Capesize 5TC average 31.470 + 6.7 % Panamax 4TC average (74k) 16.424 - 6.0 % Supramax 10TC average (58k) 14.669 + 6.0 % Handysize 6TC average 10.045 + 12.7 % Forward / ffa front month Sep’19 ($/day) Capesize 180k 25,575 + 3.7 % Panamax 74k 14,871 + 0.7 % MPP September ’18 $ 7,216 Märkte | Markets TMI Toepfer’s Multipurpose Index September ’19 $ 7,476 12,500 tdw MPP/HL »F-Type« vessel for a 6-12 months TC Tankers Shortsea / Coaster Norbroker 3,500 dwt earnings est. 2,050 €/d + 7.9 % HC Shortsea Index 15.67 + 1.3 % ISTFIX Shortsea Index 484 - 3.6 % 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 COMPASS Baltic Dirty Tanker Index 777 + 19.7 % Baltic Clean Tanker Index 451 - 0.9 % IFO 380 Rotterdam $/t 380 + 25.8 % MGO Rotterdam $/t 580 + 6.0 % Forward / Swap price Q4 / 19 IFO 380 Rotterdam $/t 260 + 4.8 % Data per 19.09.2019, Alterations within four weeks STAY THE COURSE: WITH MARINE PRODUCTS FOR RELIABLE COOLING UNDER TOUGH CONDITIONS AT SEA. Learn more about BITZER PRODUCTS at www.bitzer.de More on GREEN POINT SERVICES at www.bitzergreenpoint.com HANSA International Maritime Journal 10 | 2019 9