Weekly Market Report. Issue: Week 27 Tuesday 10 th July Market insight

Transcription

1 Weekly Market Report Issue: Week 27 Tuesday 10 th July 2018 By George Laios Deputy CEO, Intermodal Group Market insight There is a video in YouTube produced by The Independent. In this video a girl meets a guy that initially looks like the perfect man. However, very soon she realizes that this perfect man is not exactly the way she expected him to be. His flaw? He does not have any digital footprint! He actually dislikes social media; he is not on Facebook, Instagram, LinkedIn, Pinterest, he does not use Snapchat, WhatsApp or Viber. The girl talks about her problem in panic to her friends, who in turn start believing that the young man in question may actually not exist! Just because they cannot find in the social media what he did last summer, what he had for lunch it actually crosses their minds that he might not be real. This video was obviously produced by The Independent to satirize a reality. The actual social reality of our times; the social reality of the 21th century. Whether we like it or not, if we do not have a digital footprint we may well be considered as non-existent. Especially, as far as the younger generations are concerned. However, I am afraid that it s not only the modern youngsters and their social life that have changed in the last years. Something similar applies to the (shipping) corporate world of our times. Nowadays, if a company does not have a proper corporate structure, audited financials, a tone of documents regarding shareholding it does not exist. It does not exist for financiers; it does not exist for major charterers, it does not exist for major suppliers. Companies that resist joining the 21st century are no longer on the radar of these large counterparties. The years of name lending, the years of my word is my bond are long gone. The companies that refuse to realize this, are either excluded from financing or if financed they do so in much more uncompetitive terms. There are indeed regulations and requirements imposed to modern shipping companies that are not only harsh but quite often unrealistic. There are also requirements that may cause adverse results. For example, there is the so called corporate guarantee of the holding company of a borrower that all the major banks ask for from their clients nowadays, for obvious, recourse reasons. What they do not realize though is that this holding company may be guaranteeing different loans from different banks. In other words, if bank X needs to enforce its security under its loan, then bank Y will most probably be forced to accelerate its loan regardless of it being problematic or not, since bank X can move against all assets under the holding company. Clearly, this is not a nice picture. Therefore, we do live in a very different world compared to 10 or 15 years ago. We live in a digital world; we live in the era of easily accessible information. Not adapting to these new circumstances is realistically not an option. We should therefore stop demonizing social media or the new corporate environment of transparency and reporting; what we should do? Within our new environment try to first find the way to protect ourselves and our companies and then find ways to prosper and excel. Chartering (Wet: Soft-/ Dry: Stable+ ) The impressive jump in Capesize rates offered another generous boost to the dry bulk index last week, while the performance of the rest of the sizes lagged behind. The BDI today (10/07/2018) closed at 1,555 points, down by 54 points compared to Monday s (09/07/2018) levels and increased by 79 points when compared to previous Tuesday s closing (03/07/2018). Despite healthier activity in the Middle East market last week, momentum in the crude carriers market remained negative across the board last week. The BDTI today (10/07/2018) closed at 732, increased by 30 points and the BCTI at 499, a decrease of 2 points compared to previous Tuesday s (03/07/2018) levels. Sale & Purchase (Wet: Soft - / Dry: Soft - ) As we approach the summer season peak SnP activity slows down, while the impact of the recently introduced requirements for vessel imports in China is already visible on the number of dry bulk deals, with a number of buyers moving to the sidelines for now and talk of failing deals heating up. On the tanker side we had the sale of the IVER EXPERI- ENCE (45,650dwt-blt 00, S. Korea), which was sold to Indian owner, Seven Islands Shipping, for a price in the region of $7.5m. On the dry bulker side sector we had the sale of the ORIENTE SHINE (31,820dwtblt 01, Japan), which was sold to Chinese buyers, for a price in the region of $7.06m. Newbuilding (Wet: Stable+ / Dry: Stable+) The newbuilding market has seen a slightly smaller number of orders surfacing during the past week compared to the average weekly contracting volumes of the past months, while given that we are now almost half way through the summer season, this slowdown has been more or less expected by most. Saying that, overall newbuilding data points to a much busier market this year indeed. Looking at the numbers concerning the first half of 2018, it is clear that newbuilding momentum has been getting stronger in both the dry bulk and tanker sectors, with the year to date increase in in terms of number of vessels ordered calculated at around 140% and 50% respectively. The biggest increases as far as dry bulk orders are concerned are noted in Kamsarmax and Ultramax sizes, while on the tanker side the same holds for Suezmax and MR vessels. In terms of recently reported deals, US listed owner, Teekay, placed an order for two firm shuttle tankers (154,000 dwt) at Samsung, in S. Korea for a price in the region of $125.0m and delivery set in Demolition (Wet: Soft - / Dry: Soft -) The demolition market shifted into a lower gear during the past days, with the weakening momentum evidenced in both softer prices and less appetite on behalf of cash buyers. Given the fact that we are almost half-way through the summer season and that an impressive number of high ldt vessels have been sold for scrap during the past couple of months, this slowdown was more or less expected. Saying this, the slump in local steel prices in India together with a weakening Indian Rupee, could sooner rather than later affect prices across the board. Indeed, with Bangladeshi buyers having no incentive at this stage to sustain their premiums over competition in order to secure tonnage and cash buyers in Pakistan assessing the recently introduced sales tax, we expect demo prices to keep softening in the following weeks. Average prices this week for tankers were at around $ /ldt and dry bulk units received about $ /ldt.

2 WS points Dirty Clean Aframax Suezmax VLCC WS points Tanker Market Vessel VLCC Suezmax Aframax Panamax MR Handy Routes Week 27 Week ±% WS points WS points 265k MEG-JAPAN 48 14, , % 20,658 41, k MEG-USG ,429 44, k WAF-CHINA 50 13, , % 19,815 41, k MED-MED 78 13, , % 17,617 29, k WAF-USAC 73 11, , % 12,917 23, k BSEA-MED 85 16, , % 17,617 29,930 80k MEG-EAST 100 9, , % 11,560 20,111 80k MED-MED 80 3, , % 15,136 20,684 80k UKC-UKC , , % 11,912 26,526 70k CARIBS-USG 112 9, , % 14,479 20,501 75k MEG-JAPAN 102 8, , % 10,082 16,480 55k MEG-JAPAN 121 7, , % 8,262 12,891 37K UKC-USAC 106 2, , % 8,975 10,622 30K MED-MED 130 3, , % 6,703 9,056 55K UKC-USG 98 4, , % 10,421 15,726 55K MED-USG 98 4, , % 9,613 14,879 50k CARIBS-USAC 115 6, , % 10,544 15,549 TC Rates Week 27 Week 26 ±% Diff k 1yr TC 23,000 23, % 0 27,524 38, k 3yr TC 30,000 30, % 0 28,830 34, k 1yr TC 16,000 16, % 0 18,788 27, k 3yr TC 21,000 21, % 0 19,330 25, k 1yr TC 15,000 15, % 0 16,034 22, k 3yr TC 17,500 17, % 0 17,339 20,948 75k 1yr TC 13,000 13, % 0 12,986 19,127 75k 3yr TC 14,500 14, % 0 14,253 18,592 52k 1yr TC 13,000 13, % 0 13,375 15,410 52k 3yr TC 15,000 15, % 0 14,287 15,681 36k 1yr TC 12,000 12, % 0 12,053 14,380 36k 3yr TC 13,500 13, % 0 13,200 14, mos - MISSISSIPPI' ,000 dwt - - $13,000/day - Norient VLCC Suezmax Aframax LR1 Indicative Market Values ($ Million) - Tankers Vessel 5yrs old MR Indicative Period Charters mos - 'VALROSSA' ,344 dwt - - $12,750/day - PMI TD3 TD6 TD9 TC1 TC2 TC5 TC6 Jul-18 avg Jun-18 avg DIRTY - WS RATES CLEAN - WS RATES ±% KT DH % KT DH % KT DH % KT DH % KT DH % Chartering The crude carriers market witnessed another disappointing week, with very few positive exceptions across the board, while the fact that the Middle East market was admittedly busier compared to the week prior, did little to support sentiment. The period market continues to see some increased activity at the same time, with recently reported rates reflecting a stable market and focus remaining on longer periods. Oil prices were mixed yesterday, with analysts now focusing on today s strike by workers on Norwegian oil and gas offshore rigs as well as on the continuous disruptions in Middle East on the back of extended tension in the region. The improvement in Middle East demand last week failed to translate into premiums over last done VLCC rates, with surplus tonnage in the region allowing charterers to maintain control, while the West Africa market also moved negatively in sync with the Middle East. The West Africa Suezmax manage to advance on steady European enquiry, while the Black Sea Med market moved sideways on steady demand. On the Aframax front, rates in the Med showed no signs of improvement, leaving little room to owners looking to increase their ideas, while the Caribs Afra saw another uninspiring week that ended with further substantial discounts. Sale & Purchase In the VLCC sector we had the sale of the F WHALE (319,869dwt-blt 11, S. Korea), which was sold to undisclosed buyers, for a price in the region of $45.0m. In the MR sector we had the sale of the IVER EXPERIENCE (45,650dwt-blt 00, S. Korea), which was sold to Indian owner, Seven Islands Shipping, for a price in the region of $7.5m. Intermodal Research 10/07/2018 2

3 Handysize Supramax Panamax Capesize Index Dry Bulk Market Baltic Indices Week 27 Week 26 06/07/ /06/2018 Point Diff ±% Index Index Index Index BDI 1,622 1, , BCI 3,086 $24,273 2,170 $18, % 2,094 1,030 BPI 1,347 $10,821 1,336 $10, % 1, BSI 999 $10,892 1,042 $11, % BHSI 563 $8, $8, % Period Week Week ±% Diff K 6mnt TC 23,500 19, % 3,750 15,671 7, K 1yr TC 21,000 19, % 1,750 14,844 7, K 3yr TC 19,500 17, % 1,750 13,892 8,728 76K 6mnt TC 13,000 13, % 0 10,984 6,492 76K 1yr TC 12,750 12, % 0 11,113 6,558 76K 3yr TC 12,250 12, % 0 11,171 7,068 55K 6mnt TC 13,000 13, % 0 10,421 6,582 55K 1yr TC 13,250 13, % 0 10,166 6,851 55K 3yr TC 12,250 12, % 0 10,176 6,827 30K 6mnt TC 11,250 11, % 0 8,662 5,441 30K 1yr TC 11,000 11, % 0 8,248 5,511 30K 3yr TC 9,750 9, % 0 8,464 5,950 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Indicative Period Charters - 4 to 7 mos - 'PANAMANIAN' ,488 dwt - Tianjin prompt - $13,250/day - Hyundai Glovis - 6 to 9 mos - 'PACIFIC SEAGULL' ,463 dwt - Zhanjiang 05/08 Jul - $ 13,250/day - Cargill Baltic Indices BCI BPI BSI BHSI BDI Average T/C Rates Average of the 4 T / C AVR 4TC BPI AVR 5TC BSI AVR 6TC BHSI Chartering The impressive performance of Capes resumed last week as well, sending the BDI above 1,600 points, a new 2018 high for the index. The surge in earnings for this size have also started providing a boost to the Panamax market, while rates for the smaller bulkers ended the week with minor losses yet again. On the period front, things remained overall quiet, with the split spot market performance still causing confusion as to whether it makes sense to fix periods at this stage. At the same time, the little activity reported mainly concerned Kamsarmax vessels and smaller periods up to 9 months, while numbers suggested unchanged levels compared to last dones. With rates in the Atlantic on a crazy course and the Pacific market overall steady, it was a particularly good week for Capes, average earnings of which climbed above $24,000/day, a level last visited back in December. Expectations for the following days are less bullish though following the intense fixing of the past days as well as the ground the market has covered in a relatively short period of time. Vessel 5 yrs old Capesize Panamax Supramax Handysize Indicative Market Values ($ Million) - Bulk Carriers Jul-18 avg Jun-18 avg ±% k % K % k % K % Sale & Purchase In the Handysize sector we had the sale of the ORIENTE SHINE (31,820dwt-blt 01, Japan), which was sold to Chinese buyers, for a price in the region of $7.06m. In the same sector we had the sale of the GENCO PROGRESS (29,952dwtblt 99, Japan), which was sold to Chinese buyers, for a price in the region of $5.55m. The surge in Capesize Atlantic rates diverted interest to Panamax vessels and with a number of charterers looking into splitting cargoes, Panamax earnings were given a generous boost as a result. Despite a slightly less busy ECSA, there were some impressive numbers reported for Kamsarmax vessels out of the region, while the market in the East remained positional. Rates for the smaller sizes stayed negative, with small overall losses noted across all key trading regions, while Supramax tonnage started to see some improvements in USD and Med regions closer to the weekend. Intermodal Research 10/07/2018 3

4 Secondhand Sales Tankers Size Name Dwt Built Yard M/E SS due Hull Price Buyers Comments VLCC F WHALE 319, HYUNDAI, S. Korea Wartsila DH $ 45.0m undisclosed MR IVER EXPERIENCE 45, SAMHO, S. Korea MAN-B&W DH $ 7.5m Indian (Seven Islands Shipping) MR ANDREAS 35, DAEDONG, S. Korea Sulzer DH high $ 5.0m undisclosed SMALL VINGA SAFIR 2, TORLAK, Turkey MaK DH undisclosed Danish (Monjasa) Size Name Dwt Built Yard M/E SS due Gear Price Buyers Comments KMAX TRADE UNITY 82, JIANGSU NEW YANGZIJIAN, China Bulk Carriers MAN-B&W undisclosed undisclosed HANDY ORIENTE SHINE 31, HAKODATE DOCK, Japan Mitsubishi 4 X 30t CRANES $ 7.06m Chinese HANDY GENCO EXPLORER 29, OSHIMA, Japan B&W 4 X 30t CRANES $ 5.55m Chinese HANDY GENCO PROGRESS 29, OSHIMA, Japan B&W 4 X 30t CRANES $ 5.55m Chinese Containers Size Name Teu Built Yard M/E SS due Gear Price Buyers Comments POST PMAX HAMBURG BAY 6, KOYO MIHARA, Japan MAN-B&W $ 21.0m US based FEEDER MAENAM 1 1, IWAGI, Japan B&W $ 3.0m undisclosed Gas/LPG/LNG Type Name Dwt Built Yard M/E SS due Cbm Price Buyers Comments LPG FOUNTAIN RIVER 49, KAWASAKI, Japan B&W 79,527 $ 16.0m Greek (Naftomar) LPG SANKO INNOVATOR 26, HYUNDAI, S. Korea MAN-B&W 34,483 $ 16.0m European LPG SANKO INDEPENDENCE 26, HYUNDAI, S. Korea MAN-B&W 34,483 $ 16.0m European LPG GAS LEGACY 3, SHITANOE, Japan Mitsubishi 3,514 $ 4.5m U.S based Intermodal Research 10/07/2018 4

5 million $ million $ Gas Tankers Bulkers Newbuilding Market Indicative Newbuilding Prices (million$) Vessel Week Week ±% Capesize 180k % Kamsarmax 82k % Ultramax 63k % Handysize 38k % VLCC 300k % Suezmax 160k % Aframax 115k % LR1 75k % MR 50k % LNG 174k cbm % LGC LPG 80k cbm % MGC LPG 55k cbm % SGC LPG 25k cbm % The newbuilding market has seen a slightly smaller number of orders surfacing during the past week compared to the average weekly contracting volumes of the past months, while given that we are now almost half way through the summer season, this slowdown has been more or less expected by most. Saying that, overall newbuilding data points to a much busier market this year indeed. Looking at the numbers concerning the first half of 2018, it is clear that newbuilding momentum has been getting stronger in both the dry bulk and tanker sectors, with the year to date increase in in terms of number of vessels ordered calculated at around 140% and 50% respectively. The biggest increases as far as dry bulk orders are concerned are noted in Kamsarmax and Ultramax sizes, while on the tanker side the same holds for Suezmax and MR vessels. In terms of recently reported deals, US listed owner, Teekay, placed an order for two firm shuttle tankers (154,000 dwt) at Samsung, in S. Korea for a price in the region of $125.0m and delivery set in Tankers Newbuilding Prices (m$) Bulk Carriers Newbuilding Prices (m$) 180 VLCC Suezmax Aframax LR1 MR 110 Capesize Panamax Supramax Handysize Units Type Size Yard Delivery Buyer Price Comments 2 Tanker 157,000 dwt Hyundai Samho, S. Korea 2020 Greek (Central Shipping) undisclosed 2 Tanker 154,000 dwt Samsung, S. Korea US listed (Teekay) $ 125.0m 1 Combo Carrier 83,500 dwt Jiangsu Yangzijiang, China Newbuilding Orders 2020 Norwegian (Klaveness) around $40.0m options declared, scrubber fitted DP2, ice class 1A, shuttle tankers dru bulk & liquid carrier 1 Gas 173,400 cbm DSME, S. Korea 2020 Norwegian (Seatankers) undisclosed LNG 1 Cruise 16,000 GT Vard Langsten, Norway 2021 German (Hapag Lloyd Cruises) undisclosed 230 pax, 120 cabins Intermodal Research 10/07/2018 5

6 $/ldt $/ldt Dry Bulk Tanker Demolition Market Indicative Demolition Prices ($/ldt) Markets Week Week ±% Bangladesh % India % Pakistan % China % Turkey % Bangladesh % India % Pakistan % China % Turkey % The demolition market shifted into a lower gear during the past days, with the weakening momentum evidenced in both softer prices and less appetite on behalf of cash buyers. Given the fact that we are almost half-way through the summer season and that an impressive number of high ldt vessels have been sold for scrap during the past couple of months, this slowdown was more or less expected. Saying this, the slump in local steel prices in India together with a weakening Indian Rupee, could sooner rather than later affect prices across the board. Indeed, with Bangladeshi buyers having no incentive at this stage to sustain their premiums over competition in order to secure tonnage and cash buyers in Pakistan assessing the recently introduced sales tax, we expect demo prices to keep softening in the following weeks. Average prices this week for tankers were at around $ /ldt and dry bulk units received about $ /ldt. The highest price amongst recently reported deals was paid by Bangladeshi breakers for the Ore carrier ORE VITORIA (233,016dwt-26,695ldt-blt 89), which received $440/ldt. 475 Tanker Demolition Prices Bangladesh India Pakistan China Turkey 475 Dry Bulk Demolition Prices Bangladesh India Pakistan China Turkey Demolition Sales Name Size Ldt Built Yard Type $/ldt Breakers Comments ORE VITORIA 233,016 26, NKK, Japan BULKER $ 440/Ldt Bangladeshi ANNAPURNA 17,562 8, HYUNDAI, S. Korea GAS $ 410/Ldt Indian as-is Dubai, incl. bunkers NANGA PARBAT 17,601 8, HYUNDAI, S. Korea GAS $ 410/Ldt Indian as-is Dubai, incl. bunkers ANDESGAS 16,263 6, MEYER, Germany GAS $ 440/Ldt Indian Intermodal Research 10/07/2018 6

7 380cst Currencies Stock Exchange Data MGO Commodities & Ship Finance Market Data 6-Jul-18 5-Jul-18 4-Jul-18 3-Jul-18 2-Jul-18 W-O-W Change % 10year US Bond % S&P 500 2, , , , , % Nasdaq 7, , , , , % Dow Jones 24, , , , , % FTSE 100 7, , , , , % FTSE All-Share UK 4, , , , , % CAC40 5, , , , , % Xetra Dax 12, , , , , % Nikkei 21, , , , , % Hang Seng 28, , , , , % DJ US Maritime % $ / % $ / % / $ % $ / NoK % Yuan / $ % Won / $ 1, , , , , % $ INDEX % oil Basic Commodities Weekly Summary Oil WTI $ Oil Brent $ Gold $ 1,350 1,300 1,250 gold 1,200 1,150 Bunker Prices 6-Jul Jun-18 W-O-W Change % Rotterdam % Houston % Singapore % Rotterdam % Houston % Singapore % Company Maritime Stock Data Stock Exchange Curr. 06-Jul Jun-18 W-O-W Change % AEGEAN MARINE PETROL NTWK NYSE USD % CAPITAL PRODUCT PARTNERS LP NASDAQ USD % COSTAMARE INC NYSE USD % DANAOS CORPORATION NYSE USD % DIANA SHIPPING NYSE USD % DRYSHIPS INC NASDAQ USD % EAGLE BULK SHIPPING NASDAQ USD % EUROSEAS LTD. NASDAQ USD % GLOBUS MARITIME LIMITED NASDAQ USD % NAVIOS MARITIME ACQUISITIONS NYSE USD % NAVIOS MARITIME HOLDINGS NYSE USD % NAVIOS MARITIME PARTNERS LP NYSE USD % SAFE BULKERS INC NYSE USD % SEANERGY MARITIME HOLDINGS CORP NASDAQ USD % STAR BULK CARRIERS CORP NASDAQ USD % STEALTHGAS INC NASDAQ USD % TSAKOS ENERGY NAVIGATION NYSE USD % TOP SHIPS INC NASDAQ USD % Market News KTB Asset Management launches $30m shipping fund. Money will be invested in three shuttle tankers building for Teekay at Samsung Heavy Industries. South Korea s KTB Asset Management has launched a private equity fund worth $30m as part of efforts to accelerate the recovery of local shipbuilders. The fund, which will have a tenure of five years, plans to invest in three 155,000-dwt shuttle tankers on order Samsung Heavy Industries Co for Teekay. The investment would generate stable profits based on the long-term contract between one of the major ship owners and shippers in the world, the Pulse daily reported quoting an unnamed KTB Asset Management official. The KTB shipping fund is said to be the first shipping fund released by South Korean asset managers in three years. The fund has been launched as part of the Korean government s Ocean Value-up Fund Program led by state-run Korea Development Bank. KTB Asset Management is reported to have been actively looking for shipping investment opportunities in Norway, Germany, the UK and Singapore. On Tuesday TradeWinds reported that Teekay Offshore Partners had emerged as the mystery owner behind orders for two special-purpose ships unveiled last week by the shipbuilder... (TradeWinds) The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co. Written by Intermodal Research & Valuations Department research@intermodal.gr Ms. Eva Tzima e.tzima@intermodal.gr Mr. George Panagopoulos g.panagopoulos@intermodal.gr