MARKET COMMENTARY PANAMAX PANDEMONIUM!

Size: px

Start display at page:

Download "MARKET COMMENTARY PANAMAX PANDEMONIUM!"

Ashlyn Day
6 years ago
Views:

+N 04 th December, 2015 Volume 160, Issue 701 Week 49 I used to want the words She tried on my tombstone. Now I want She did it.' - Katherine Dunham Highlights: MARKET COMMENTARY PANAMAX PANDEMONIUM!

With at least 15 panamax bulkers being offered in the market for sale this week, nervous end buyers began to rollback their offers substantially, confident of securing cheaper units in the days ahead

1 +N 04 th December, 2015 Volume 160, Issue 701 Week 49 I used to want the words She tried on my tombstone. Now I want She did it.' - Katherine Dunham Highlights: MARKET COMMENTARY PANAMAX PANDEMONIUM! Sales rack up. With at least 15 panamax bulkers being offered in the market for sale this week, nervous end buyers began to rollback their offers substantially, confident of securing cheaper units in the days ahead as supply continues to outstrip demand. Over supply. Much like May of this year, when a huge number of pre-budget capesize bulkers were sold, the panamax bulker sector continues to see a flurry of candidates being made available as charter rates continue to disappoint (in most cases not offering owners even above opex rates to charter their older vessel). New lows. Each new day seems to bring with it new lows and worsening sentiments across the subcontinent, as shaken end buyers continue to withdraw their offers in light of the deluge of candidates being made available - instead adopting a wait-and-watch attitude, in order to determine just how far levels will drop. Lack of alternatives. Initially, owners seemed reluctant to do business at these lower overall levels below USD 300/LT LDT, but by the end of the week, several sales into both Pakistan and Bangladesh showed the lack of open alternatives to desperate owners, who are losing money by the day. India back in play. The chances are that rates may still drop lower in the weeks ahead as some of the more aggressive buyers secure units, leaving owners in the unenviable position of chasing the market down and being forced to accept new realities by simply selling at best on the table on the intended day of conclusion. Declining prices in both Pakistan and Bangladesh has seen India come unexpectedly back into the picture again having previously stranded some USD 20 USD 25/LT LDT behind their competitors. For week 49 of 2015, GMS demo rankings for the week are as below: Cash Buyer to be ISO 9001:2008 Certified Demo Ranking Country Market Sentiment GEN CARGO Prices TANKER Prices 1 Bangladesh Weak USD 270/lt ldt USD 300/lt ldt 2 India Weak USD 265/lt ldt USD 295/lt ldt 3 Pakistan Weak USD 260/lt ldt USD 290/lt ldt 4 Turkey Weak USD 170/lt ldt USD 175/lt ldt 5 China Weak USD 125/lt ldt USD 145/lt ldt

2 GMS Weekly Page 2 of 8 BANGLADESH CHASING DOWN! Vessels stuck. A number of high-priced vessels remain stranded at anchorage this week as end buyers continue to struggle to get respective LCs open and released in a timely manner. This is testament to the fact that those end buyers who are currently available to take on tonnage are second and third tier buyers as many of the bigger buyers have already stocked their yards with tonnage, over the recent past. 4 units sold. Acutely aware of the falls in the Pakistani and Indian markets and with the over supply of tonnage plaguing the industry overall, end buyers in Bangladesh expectedly started to position their levels at lower numbers, hoping to secure a cheap deal or two. Several handysize bulkers were concluded as the JIA DA 16 (7,604 LDT) was committed for USD 270/LT LDT and the Precious controlled SUJITRA NAREE (6,262 LDT) was sold for USD 275/LT LDT. The youngest panamax bulker sold so far this year saw the 1998 built Augustea controlled RIBBON (10,116 LDT) concluded for USD 305/LT LDT with 1,200 Ts bunkers on board at the time of delivery and the Eurobulk container DESPINA P (8,760 LDT) sold for USD 310/LT LDT (with the option for an India delivery at a higher USD 315/LT LDT as the vessel is in the Far East). MARKET SALES REPORTED VESSEL NAME TYPE LDT REPORTED PRICE DESPINA P Container 8,760 USD 310/LT LDT JIA DA 16 Bulker 7,604 USD 270/LT LDT RIBBON Bulker 10,116 USD 305/LT LDT (with 1,200 Ts bunkers) SUJITRA NAREE Bulker 6,262 USD 275/LT LDT

3 Page 3 of 8 GMS Weekly INDIA BACK IN PLAY! The Indian market unwittingly returned to the fray this week as offers from competing neighbors declined to such an extent, that markets across the Indian sub-continent appeared to be competing again. Competing again. As a result, several private containers were concluded this week. However, the fact that only yards in Alang remain open to buy, remains a prevailing cause of concern to ship owners and cash buyers alike. Once the bottom is reached and some sustained stability in the markets is seen, yards will get the much-needed encouragement to open up again and banks may become increasingly willing to lend - in what has become a rather barren industry of late thanks to the losses experienced, with the market having halved in value in just over a year. While the chief culprit remains the cheap Chinese billets (which continues to undercut steel inventories on yards), the Indian Rupee too has deteriorated drastically of late and continues to trade at a worrying figure in excess of Rs. 66 against the U.S. Dollar. One market vessel was concluded into India this week (with a few others also done to competing markets with India options), as the full spares handysize bulker ISMAIL DEEB (6,384 LDT) was committed for USD 283/LT LDT. Market halved. Below 300. The new realities on offers emanating from Alang is ensuring that most vessels are now seeing well below USD 300/LT LDT, with (initially) reluctant ship owners now left with no other option but to sell at these greatly reduced rates. There has been further talk this week that some new duties might be imposed on incoming Chinese billets and this offered some temporary enthusiasm to the buying. But as with Pakistan, until these duties are actually imposed, there is little point in getting excited. MARKET SALES REPORTED VESSEL NAME TYPE LDT REPORTED PRICE ISMAIL DEEB Bulker 6,384 USD 283/LT LDT (full spares)

4 GMS Weekly Page 4 of 8 PAKISTAN SPOOKED! Plethora of tonnage. Pakistan buyers appeared spooked this week with the amount of tonnage (particularly panamax bulkers) that continued to pour into the market from beleaguered ship owners. This did not stop a number of deals being concluded, albeit at these greatly reduced levels, as a weekending surge in deals saw four bulkers concluded - all below USD 300/LT LDT. Deals done. Last week, news on the increased duties on Chinese billets (by 1%) in the mini-budget, counteracted measures imposed on luxury goods (which included scrap steel), leaving the market as stagnant and unstable as before. In deals done, the NEW SMART (9,714 LDT) was sold from Hong Kong owners for a decent USD 296/LT LDT with 600 Ts bunkers remaining on board at the time of delivery (again with an India option), Greek owners concluded the larger LDT ARETI (14,266 LDT) for USD 285/LT LDT, whilst the full spares handymax EIRINI L (8,107 LDT) was sold for USD 290/LT LDT, and the DONA ZOITSA (9,861 LDT) was fixed for USD 288/LT LDT. MARKET SALES REPORTED VESSEL NAME TYPE LDT REPORTED PRICE ARETI Bulker 14,266 USD 285/LT LDT DONA ZOITSA Bulker 9,861 USD 288/LT LDT EIRINI L Bulker 8,107 USD 290/LT LDT (full spares) NEW SMART Bulker 9,714 USD 296/LT LDT (with 600 Ts bunkers)

5 Page 5 of 8 GMS Weekly CHINA FREIGHT RATES DOWN / SUPPLY UP! As all Indian sub-continent markets concluded their respective share of vessels this week, Chinese recycling yards once again missed out on their share of tonnage, as levels offered by local yards remain stranded in the low USD 100s/LT LDT. With freight rates for dry and container vessels as poor as they currently are, there will continue to be a steady supply of state controlled vessels to local yards eligible for the Chinese subsidies. News persists in both Pakistan and India that increased duties will be imposed on the cheap Chinese billets that continue to derail international steel markets and all concerned will be keeping a close eye on these developments. Missing out. Sub continent duties. NO MARKET SALES REPORTED

6 GMS Weekly Page 6 of 8 TURKEY LEVELS YOYO... Prices up again by USD 5/MT. A short-term increase in demand from domestic re-rolling mills resulted in improved offers for vessels from the Turkish market, by about USD 5/MT this week. Nevertheless, despite the ongoing recent weekly fluctuations in prices witnessed of late, the fact remains that in order for any market vessels to be concluded here, not only do prices from Turkey need to make a notable jump, but a certain degree of aggressiveness also needs to stem from local yards. The negative fluctuations in commodities across the board has also affected Turkish buyers, who have witnessed their investments return results well below what they were expecting / aiming for. Finally, the ongoing political crisis with Russia appears to be increasingly affecting the Turkish economy and everyone appears to be on a wait and watch mode, in order to monitor future developments. NO MARKET SALES REPORTED

7 Page 7 of 8 i Miscellaneous THE HUMAN BODY The human heart beats around 100,000 times every day or about 30 million times in a year. Our blood is on a 60,000-mile journey per day. Our eyes can distinguish up to ten million color surfaces and take in more information than the largest telescope known to man. When we touch something, we send a message to our brain at 124 mph We make around 1 to 1.6 liters of saliva a day. Our nose is our personal air-conditioning system: it warms cold air, cools hot air and filters impurities. A person can expect to breathe in about 45 pounds of dust over his/her lifetime. There are more living organisms on the skin of a single human being than there are human beings on the surface of the earth. Your body contains enough iron to make a spike strong enough to hold your weight. IMPORTANT DATES BANK HOLIDAYS INDIA BEACHING TIDES December 24 Id-E-Milad December 25 - Christmas December 10 December 17 December 22 December 30 BANK HOLIDAYS BANGLADESH BEACHING TIDES December 16 Bijoy Dibosh (Victory Day) December 24 Eid Milad Un-Nabi December 25 Christmas December 31 Bank Holiday November 25 November 27 December 14 December 16 December 27 December 29 IMPORTANT BANK HOLIDAYS TURKEY PAKISTAN CHINA No more holidays until 2016 December 24 - Eid Milad Un-Nabi December 25 Birthday of Jinnah No more holidays until 2016 Prices indicated above are as reported in the market and are not necessarily accurate. This information is provided without prejudice and is given in good faith and without any guarantees whatsoever. While every care has been taken in the preparation of this report, no liability can be accepted for any loss incurred in any way whatsoever by any person relying on the information contained herein. Opinions expressed herein may be deemed subjective and arbitrary. This WEEKLY is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of this information by persons or entities other than the intended recipient is prohibited.

8 GMS Port Report Page 8 of 8 ALANG - Port Position as December 04, 2015 No. VESSEL NAME LDT TYPE STATUS 1 Cathay 18,530 Bulk Carrier Beached December 02 2 Fortune 5,124 Container Beached December 01 3 Infinity 7,878 Bulk Carrier Arrived October 04 4 Ocean Lovely 6,853 Bulk Carrier Arrived December 03 5 Reijo 1 2,259 General Cargo Beached December 01 6 Trustworthy 4,573 Bulk Carrier Beached December 04 7 Tsunomine 19,701 Bulk Carrier Beached November 28 Total Tonnage 64,918 CHITTAGONG - Port Position as of December 04, 2015 No. VESSEL NAME LDT TYPE STATUS 1 Acer 22,144 Container Arrived December 03 2 Nanhai Kai Tuo (Under Tow) 30,763 FPSO Beached December 02 3 Navigator 22,370 Bulk Carrier Beached November 29 4 New Casle Max 9,460 Bulk Carrier Arrived November 28 5 Rui Fu Star 7,478 Bulk Carrier Beached November 28 6 Rui Fu Union 8,200 Bulk Carrier Arrived November 19 7 Taio Rainbow 9,235 Woodchip Carrier Arrived December 03 8 Venus 9,937 Bulk Carrier Arrived December 01 Total Tonnage 119,587 GADANI - Port Position as of December 04, 2015 No. VESSEL NAME LDT TYPE STATUS 1 Araevo 9,680 Bulk Carrier Beached December 01 2 Go Pub 9,808 Bulk Carrier Beached December 01 3 Renuar 12,033 Bulk Carrier Beached December 04 4 RZS Fortune 19,960 Bulk Carrier Beached December 01 Total Tonnage 51,481 WHILE EXTREME CARE HAS BEEN TAKEN IN THE PREPARATION OF THIS REPORT, NO LIABILITY CAN BE ACCEPTED FOR ANY LOSS INCURRED IN ANY WAY WHATSOEVER BY ANY PERSON RELYING ON THE INFORMATION CONTAINED HEREIN.

PERKING UP! MARKET COMMENTARY. Highlights: Cash Buyer to be ISO 9001:2008 Certified. March 27 th, 2015 Volume 151, Issue 665 Week 13

PERKING UP! MARKET COMMENTARY. Highlights: Cash Buyer to be ISO 9001:2008 Certified. March 27 th, 2015 Volume 151, Issue 665 Week 13 March 27 th, 2015 Volume 151, Issue 665 Week 13 If you are not willing to risk the usual, you will have to settle for the ordinary. - Jim Rohn Highlights: MARKET COMMENTARY PERKING UP! Will to offer returns.