HANSA 12-2019

MÄrkte | Markets Big

MÄrkte | Markets Big boxships coming under pressure Charter rates for post-panamax vessels are edging down as the winter low season kicks in. Still, market sentiment remains fairly strong. By Michael Hollmann The charter market is ticking along in a fairly steady fashion as the end of the year approaches. The last couple of weeks saw a sideways rate trend in many size classes, with only smaller post-panamaxes and wide-beam vessels suffering a decline whereas geared 2,500 TEU vessels achieved some gains. Accordingly, the Howe Robinson Containership Index, which covers all size class up to 8,500 TEU, nudged down by around 2.0% over the past four weeks while the New ConTex with its limited coverage of the 1,100-4,250 TEU segments is basically unchanged. Firm demand for large gearless vessels (classic post-panamaxes) is reported to have ebbed away for now as container lines are focused on maximising the utilisation of their own tonnage as cargo flows slow down after the peak season. The impact on market rates has been limited, though, due to the fact that some sub-segments such as 8,500 TEU do not see any ships in spot position at all. Hence, market levels do not get tested. For modern wide-beam vessels (3,800- 5,400 TEU) and for smaller post-panamaxes in the 5,500-6,500 TEU range it has been a different story. Spot requirements for ships coming off charter are hard to come by these days, forcing rates down by several thousand dollars in some cases, brokers reported. 6,500 TEU class vessels saw fixing levels pushed down to 21,000 $/ day. Come end of November, assessements are down to around 23,700 $/day (6,500 TEU) and 18,900 $ day (5,700 TEU), respectively – a decline of 10-15%. For wide-beam vessels, the falls were even sharper. Some weeks earlier in September, rates had peaked at well over 20,000 $. 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. The slowdown in demand for larger tonnage is a common feature of the market during the fourth quarter when the seasonal weakness in cargo volumes forces carriers to offload tonnage. However, some brokers point to a silver lining on the horizon, suggesting that appetite for larger charter vessels might be back sooner than expected. There are two reasons cited. First of all, with an early Chinese New Year this time in late January, the slack cargo season might be shorter than in other years. Secondly, the widely reported delays on scrubber installations on existing ships might force carriers to look for replacements, at least for short durations. Developments in the segments from panamax down to feeder class ships were more stable. Baby panamax vessels even managed to recoup some losses and bring rates up again to 14,000 $ in Asia on a steady flow of fixtures. Gearless 3,500 TEU vessels showed a similar rate trajectory. In the 2,500-2,800 TEU sub-panamax sectors, there were diverging trends, with gearless 2,700/2,800 TEU ships faced with a slowdown in business and stagnant rates of 10,500-11,000 $/day in Asia. By contrast, demand for geared 2,500 TEU gained further momentum, lifting rate levels into five-digit territory in all regions. Remarkable increases were seen in the Atlantic and the Mediterranean where benchmarks for standard vessels rose into the 10,000-10,500 $/day range – up from 8,500-9,000 $ a few weeks before. For ships in the feeder classes below 2,000 TEU, chartering activity is reported to have intensified in some sectors (especially around 1,700 TEU). However, rate levels were stagnating as illustrated by unchanged assessments month-onmonth for 1,700 and for 1,100 TEU ships in the ConTex. n Hefty rate falls for bulkers Dry bulk freights suffered a steep decline over the past four weeks. The severest drops were recorded in the supramax and the panamax sectors, although the picture would change week after week. Around the middle/end of November, it was the capesize segment where rate levels eroded at the fastest pace from day to day. The Baltic Dry Index is down 29% month-on-month, extending its losing streak since early September. Capesize ships recorded the heaviest falls in the Atlantic which brokers explained with another lull in fixing activity for iron ore ex Brazil and for coal within the Atlantic. Steel production in China, which drives a lot of demand, showed some weakness with its the first year-on-year decline in monthly output for almost two years. Panamaxes, which suffered a 35% fall in average time charter rates, have been confronted with growing import restrictions for coal in China, a slowdown in Atlantic grain chartering and ongoing disruption of bauxite loading in Guinea, brokers reported. For supramaxes, the export ban for nickel ore in Indonesia coupled with slower coal activity into China is likely to exerted high pressure on rates. Across Asia, fresh cargoes for handysize bulkers were lacking throughout the month. By contrast, the MPP charter market bucked the negative trend, with the Toepfer Multipurpose Index for 12,500 dwt class ships rising to $ 7,578 in November (from $ 7,515 in October). Brokers said that there was generally more parcelling activity for cargoes in Asia and also a spillover of mineral volumes in Australia.mph 8 HANSA International Maritime Journal 12 | 2019

Orders & Sales New Orders Container Contracting activity in the newbuilding market for container ships remained very quiet. MSC will buy five 23,000 TEU ships from South Korean yard DSME for 762 mill. $. The world`s second-largest carrier by capacity, exercised an option to buy the vessels as part of a previous order. The ships will be delivered from mid-2021 onwards. Secondhand Sales Container Activity decreased compared to the previous reporting period. In total, four vessels changed hands. In the feeder segment, the sideways moving charter market prevents some players from financing transactions. Potential sellers have to accept that prices need to be adapted if they want to sell their assets. Demolition Sales Since mid-September the world market price for iron ore decreased by 15% to around /t. There are still no signs of improvement from the Sub-Continent recycling markets. Scrap prices tended sideways or decreased. However, at the Bangladeshi market for instance, yards that previously missed to log in vessels now show higher prices. Thus, their peers have at least some tonnage on their plots. This was illustrated by the sale of the 2006 built 1,850 TEU »Jacob«, which achieved 0/ldt. Jan Göldner Container ship t / c market 450 400 350 21.05.19 Container freight market WCI Shanghai-Rotterdam 1,564 $/FEU + 29.2 % WCI Shanghai-Los Angeles 1,399 $/FEU + 0.4 % Dry cargo / Bulk 21.11.19 Month on Month 441 •- 0.0 % Baltic Dry Index 1260 - 29.0 % Spot time charter averages ($/day) Capesize 5TC average 18,350 - 22.7 % Panamax 4TC average (74k) 9,942 - 35.1 % Supramax 10TC average (58k) 8,30 - 38.2 % Handysize 6TC average 7,193 - 22.6 % Forward / ffa front month Sep’19 ($/day) Capesize 180k 20,469 - 1.5 % Panamax 74k 9,444 - 29.5 % MPP November ’18 $ 7,508 MÄrkte | Markets TMI Toepfer’s Multipurpose Index November ’19 $ 7,578 12,500 tdw MPP/HL »F-Type« vessel for a 6-12 months TC Tankers Shortsea / Coaster Norbroker 3,500 dwt earnings est. 3,400 €/d - 2.8 % HC Shortsea Index 18.28 + 9.4 % ISTFIX Shortsea Index 533 + 0.4 % 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 1235 - 5.8 % Baltic Clean Tanker Index 747 - 12.8 % IFO 380 Rotterdam $/t 242 + 0.0 % MGO Rotterdam $/t 545 - 6.4 % Forward / Swap price Q1 / 20 IFO 380 Rotterdam $/t 210 + 1.9 % Data per 21.11.2019, 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 12 | 2019 9