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Märkte | Markets Capacity stretched beyond Golden Week The rally in the container markets continues despite the spectre of second lockdowns. A capacity squeeze puts shipowners in the charter market firmly in the driving seat. By Michael Hollmann Concerns that the recent boom may begin to stutter after the Golden Week have proven unfounded to date. Unlike in previous years, the week-long national holiday with large-scale plant closures in China seems not to have marked a turning-point, with ships reportedly continuing to sail fully laden from the Far East to consuming centres of North America and Europe. Just a handful of ships The ongoing strength in freight rates bears testimony to it, so does the idle fleet count by Alphaliner which dropped to its lowest level in the month of October for five years. As per 12 October, the market research unit recorded 130 idle ships with a total capacity of 438,410 TEU (both liner- and tramp-controlled). This was just 1.8% of global capacity, largely made up of tonnage berthed or dry-docked in ship yards or faced with arrest or boycott. Some experts who analysed the statistics more closely suggested that no more than 15,000 TEU were available to be reactivated at short notice – literally just a handful of unfixed tramp vessels. Spot/prompt tonnage two weeks forward is the tightest it has been for a long time with more and more segments even below 3,000 TEU marked as »sold out« for immediate delivery. Average charter rates continued to increase at breakneck speed by around 10 % throughout the last month, for some classes such as 2,700 TEU gearless, 3,500 TEU gearless and 8,500 TEU post-panamaxes gains were even closer to 15%. Other eye-catching trends included steeper regional rate increases in the Atlantic where the market had been lagging behind Asia due to greater numbers of unemployed vessels. Fixing levels have been catching up, especially in the panamax sector: While vessels in the Atlantic were previously forced to accept discounts of several thousand dollars versus ships in Asia, the gap has now disappeared. Brokers assess rates more or less at similar levels of minimum 17,000 $/day. For gearless 2,700 TEU and geared 2,500 TEU ships there was still a gap of 1,000-2,500 $/d between west and east of Suez, albeit gradually diminishing. The spot supply of vessels below 2,000 TEU in North Europe dropped to zero for the first time in many months. By the middle of October, all that was left were five feeder ships in cold lay-up. Operators, pressed for capacity amid surging transhipment volumes from Asia, found no extra vessels. Viele weitere Kennzahlen & Raten auf hansa-online.de: Container, Tanker, Bulker, MPP, Shortsea, Umschlag, Bunker & Öl … und vieles mehr The few owners taking redelivery of ships and offering them back to the market achieved notable gains. Rates for 1,000 TEU ice class ships firmed up from very low to mid 5,000 €’s, soon to be outstripped by a Damen 800 type reportedly extended at 5,700 €/d for 5-7 months. Tonnage demand also picked up in the Med allowing rates for 1,100 TEU units to move up higher in the 6,000’s $/d while those for geared 1,700 TEU and also for 1,300 TEU recovered to over 7,000 $/day. More for longer … Further, there has been quite an increase in periods, with owners succeeding in securing higher rates for extended durations. A case-in-point was the extension of the 8,600 TEU »Hyundai Mercury« at 30,000 $/d for 30-32 months by MSC. Most other fixtures in the segments above 3,000 TEU were done for at least 9 months, taking ships comfortably into next summer. There were also longer period fixtures for sub-panamaxes, with the 2,824 TEU »AS Cardonia« reportedly extending with Zim for 18 months at 11,500 $/d in the Med. So, how much longer can the rally go on? More and more analysts agree that the recent cargo boom is driven by two transient trends. First of all, consumer behaviour in the western world has shifted from services to consumer goods which have to be packed and shipped. Secondly, businesses across many sectors kicked off a restocking cycle after running down their stocks during the lockdowns. How long it will take them to get back to »normal« stock levels, is up for debate. The signs are that the process will continue into next year with further peaks to be reached ahead of Christmas and ahead of Chinese New Year. In the US, the business inventories/sales ratio dropped to the lowest in more than five years back in August. At a level of 1.32, the ratio was 5.5% lower than in August 2019 – and that was before the christmas shopping season had even started. Should the current spate of corona infections dampen consumption, inventories-to-sales would of course begin to relax. Tracking the pulse of trade will be more important than ever in the coming months. n VIEWPOINT US grains – a blessing for geared bulkers Sentiment in the dry bulk market remains relatively optimistic despite some correction in rates. Jens Christian Nielsen, managing director of German shipbroker Frachtcontor, sees the fourth quarter »on a good way«. HANSA: Is the dry cargo market back in a stable setting following the rebound this summer? Time to call the end of the »crisis«? Jens Christian Nielsen: The worst seems past us. Supply/demand fundamentals for 2021 look much better: + 4.5 % forecast dry bulk cargo growth versus scheduled fleet growth of +2.2 % before scrapping. Trading in the dry cargo sphere has proven more robust than expected. Presently, we are seeing a lot of activity all over. Charter 8 HANSA – International Maritime Journal 11 | 2020
