Shipping news

[specuvestor]

Very nice and informative writeup! http://www.valuebuddies.com/thread-3788-...l#pid86034

If I may add there are 2 more factors for supply: Port congestion and repair docking schedules which usually happens in 2Q low season.

BDIY is also the only index I can recall that collapses 95% in one year. Even the dot com bust was not so dramatic. Prices is much more elastic vs airlines mainly because there is no concept of national carriers in the shipping industry. There is no concept of national pride. In the airlines the loss leaders, usually the national carriers tend to put a floor on the tarrifs... not the case with shipping.

But like the airlines they are burdened with the round trip cost. Sometimes you have to lose money on one trip to make money on the return trip due to the trade dynamics.

Lastly like u said the freight rates forecast is highly speculative. That makes capex plans even more speculative when a new built you order today likely arrives 24 months later. Shippers are essentially deep cycle cyclicals vs normal commodities cyclicals.

[Greenrookie]

What a U-turn of news

P3 alliance not allowed to operate in China yet.

http://www.hellenicshippingnews.com/the-...-in-china/

It is not too long ago that sinoshipping news report that P3 alliance will be allowed to work:

Beijing to endorse P3 Network
http://www.sinoshipnews.com/News/Beijing...c2718.html

Good news actually for the smaller players, like NOL

[Boon]

Presentation material on:

“Global Economic Trend and the Market Outlook for the Shipping Industry”

By Dr. Stavros Tsolakis
The MPA Professor in Maritime Economics and Shipping Finance,
Singapore Management University

10-April-2014

http://moorestephens.com.sg/docs/SSC2014...dustry.pdf
________________________________________________________________________________________________________________
Interesting presentation materials which also provide some interesting statistics on:
- Shadow Banking System (SBS) in China.
- PCTC (Pure Car Truck Carrier) market
- Dry Bulk market – demand for iron ore, coals from China and India

[Greenrookie]

Just sharing some news. Need free registration to read the news

'Critical' congestion at Hong Kong needs urgent government attention

Thoughts: Hmm... Wondering what to read of this? HPHT which has ports at river delta area to see a revival in througput numbers?

Maersk to spend $3 billion a year on new ship orders

And so the overcapacity continue until the biggest or most efficient alliance survive and the rest blood on the ground???

But APL which is owned by NOL is the 7th largest in the world and fourth largest in US export market, is still struggling??

[Temperament]

7th largest in the world has been managed by "Land Grabber" not Seafarer. And it is going down. If not for AH GONG, i think it has gone forever already.

[Greenrookie]

Second white list, only 9 more yards

http://sinoshipnews.com/News/Second-batc...c3408.html

[greengiraffe]

http://www.bloomberg.com/news/articles/2...ut-endures

Shipping Industry Gloomiest Since 2009 in Survey as Glut Endures
by Bill Lehane
July 6, 2015 — 7:01 AM SGT

The shipping industry is the most pessimistic in six years about its prospects as a fleet surplus persists, according to a survey by law firm Norton Rose Fulbright.
Two thirds of respondents working in the industry said they were pessimistic about its prospects, the most negative outlook since 2009, the London-based company said in a statement. The biggest contributor to their negative view was excess fleet capacity.
While parts of the maritime industry such as the market for hauling oil are surging this year, others are slumping. Rates for delivering Saudi Arabian crude to Japan, a benchmark route, just had the highest first half of a year since at least 2009. The Baltic Dry Index, measuring coal and iron ore freight, had the worst first six months ever.
“Shipping is a notoriously speculative business,” Harry Theochari, the firm’s global head of transport, who has worked in the industry for more than 30 years, said by phone. “We have this huge overcapacity but a lot of shipowners are still going out and ordering ships.”
The survey collated responses from 94 people working across the maritime industry. More than half saw over-capacity as shipping’s biggest challenge, and continuing orders for newbuild vessels has led to increased pessimism, according to Theochari.
Tanker rates from Saudi Arabia to Japan averaged $63,476 this year, according to Baltic Exchange data. The Baltic Dry Index averaged 627 points, the lowest for the start of a year since it was first published three decades ago.

[Behappyalways]

Depends which segment you are in.......


During the two year base period under the new employment, FSL Shanghai’s net daily rate represents a 54% increase while FSL Hamburg and FSL Singapore’s net daily rate represents a 31% increase for each vessel as compared to the previous time charter agreements.

FSL Trust announces new time charter contracts for three tankers worth up to US$61 million
http://infopub.sgx.com/Apps?A=COW_CorpAn...c880ef735c

Uni-Asia executive chairman Michio Tanamoto added: "There is limited supply of containerships of this size going forward. In the past few years, many liner companies placed orders for much bigger containerships, of 20,000 TEU, for example. The economics of these big vessels were better when the oil price was high."

Reputable publication TradeWinds reported that the Howe Robinson Containership Indexhas recently climbed above 600 for the first time since Oct 2011, a rise of 25% over the past two years.

The index is projected to grow to average over 1,000 in 2017 and 1,200 in 2018, it reported.
UNI-ASIA: Buys 2 containerships for US$36.2 m total
http://nextinsight.net/index.php/story-a...8-uni-asia

(So which listed companies own this size of containerships??? you got to do your homework )

http://www.bloomberg.com/news/articles/2...ut-endures

Shipping Industry Gloomiest Since 2009 in Survey as Glut Endures
by Bill Lehane
July 6, 2015 — 7:01 AM SGT

The shipping industry is the most pessimistic in six years about its prospects as a fleet surplus persists, according to a survey by law firm Norton Rose Fulbright.
Two thirds of respondents working in the industry said they were pessimistic about its prospects, the most negative outlook since 2009, the London-based company said in a statement. The biggest contributor to their negative view was excess fleet capacity.
While parts of the maritime industry such as the market for hauling oil are surging this year, others are slumping. Rates for delivering Saudi Arabian crude to Japan, a benchmark route, just had the highest first half of a year since at least 2009. The Baltic Dry Index, measuring coal and iron ore freight, had the worst first six months ever.
“Shipping is a notoriously speculative business,” Harry Theochari, the firm’s global head of transport, who has worked in the industry for more than 30 years, said by phone. “We have this huge overcapacity but a lot of shipowners are still going out and ordering ships.”
The survey collated responses from 94 people working across the maritime industry. More than half saw over-capacity as shipping’s biggest challenge, and continuing orders for newbuild vessels has led to increased pessimism, according to Theochari.
Tanker rates from Saudi Arabia to Japan averaged $63,476 this year, according to Baltic Exchange data. The Baltic Dry Index averaged 627 points, the lowest for the start of a year since it was first published three decades ago.

[greengiraffe]

China iron ore buying chatter boosts shipping index
DateSeptember 19, 2015

• Read later
  

Alaric Nightingale and Naomi Christie

[Image: 1442599320360.jpg]

The Baltic Dry Index rose 18 per cent on Thursday and Friday, the most for two days since February 2009. Photo: Bloomberg

A measure of shipping costs for commodities had its biggest two-day gain in almost seven years amid speculation Chinese iron ore purchasing is eroding the supply of vessels to collect the raw material from Brazil.
The Baltic Dry Index rose 18 per cent on Thursday and Friday, the most for two days since February 2009, according to the Baltic Exchange in London. Charter costs for Capesize ships that take iron ore to China from Brazil rose by 16 per cent to $US14.59 a ton.
Shipping costs stayed in a slump for most of this year amid speculation that slowing economic growth in China was sapping its demand for raw materials that provide the bulk of cargoes for owners. Even so, the country still imported an average of 76.67 million metric tons of iron ore a month this year, more than any other nation and little changed from the corresponding period in 2014.
"There's a misunderstanding among investors that China isn't buying iron ore: it is," Jeffrey Landsberg, the managing director of Commodore Research in New York, said by phone. "China is still buying every single ton that global miners want to sell."
Day rates for Capesize ships jumped, as did derivatives that traders use to bet on, or hedge, future shipping prices.
The vessels are earning $US13,563 and $US14,658 a day, two rates for the carriers published by the Baltic Exchange show. They were earning $US7179 and $US8288 a day respectively at the end of last month.
Derivatives called Forward Freight Agreements gained 6.7 per cent to $US15,900 a day for October contracts, according to data from Clarkson Securities, a unit of the world's biggest shipbroker.
While Australia is a bigger iron ore exporter than Brazil, shipments from the Latin America are no less important because of the distance involved in exporting to Asia, the biggest source of demand. A voyage to China and back from the Latin America takes about three months, occupying vessels about three times longer than for a comparable cargo from Australia.

[greengiraffe]

Shipping charges dive as commodity prices fall

• COSTAS PARIS
  
• THE WALL STREET JOURNAL
  
• NOVEMBER 21, 2015 12:00AM
  

0

[Image: 413320-3b340666-8f35-11e5-81cc-452cd1fd5dbf.jpg]
The Baltic Dry Index fell 2.9 per cent to 504, the lowest since it was first published in 1985. Source: Supplied
[b]The Baltic Dry Index, which measures the cost of shipping raw materials like iron ore and coal, fell to a record low yesterday, the latest sign of weak demand from China that has sent commodities prices tumbling.[/b]
The index fell 2.9 per cent to 504, the lowest since it was first published in 1985, and down about 35 per cent since the start of the year.
At its peak before the 2008 financial crisis, the index topped 11,000.
The shipping industry is experiencing a prolonged downturn brought on by sluggish global economic growth, weak international trade volumes and a glut of ships. Dry-bulk operators have been hit particularly hard, as China’s slowing economy requires less iron, coal and oil. Prices for those commodities have also tumbled this year.
A number of dry bulk operators have filed for bankruptcy, while others have been forced to delist from the New York Stock Exchange, as tumbling stock prices cut their market capitalisation below minimum requirements.
“It’s a bloodbath,” said a Greek owner of 18 dry bulk ships. “I’ve been in the business for 25 years and never seen it so bad.”
Freight rates are below the levels needed for shipowners to break even along many routes. The daily freight rate for a capesize vessel, the world’s biggest class of cargo ship, was $US4015 ($5575), with the daily operating cost around $US7500, brokers say. That doesn’t include financing costs, which can average $US20,000 a day for capesize ships.
Conditions may worsen next year, analysts say. Clarkson, a London-based ship broker, expects Chinese demand for iron ore to grow just 1 per cent next year, about half this year’s growth, while worldwide trade for the commodity will increase at the slowest pace since 2001.
Dry-bulk operators are also seeing fallout from a dam breach in Brazil earlier this month, which is expected to curtail iron ore production in the country.
“There will be less iron ore produced which means even fewer shipments,” said Basil Karatzas, who runs New York-based Karatzas Marine Advisors.