WEEKLY SHIPPING MARKET REPORT

Transcription

1 WEEKLY SHIPPING MARKET REPORT WEEK 29 (12 th to 20 th July 2014) Legal Disclaimer The information contained herein has been obtained by various sources. Although every effort has been made to ensure that this information is accurate, complete and up-to-date, Shiptrade Services S.A. does not accept any responsibility whatsoever for any loss or damage occasioned or claimed, upon reliance on the information, opinions and analysis contained in this report. Research compiled by: Shiptrade Services S.A. Market Research on behalf of the Sale & Purchase, Dry Cargo Chartering and Tanker Chartering Departments. For any questions, please contact: Shiptrade Services S.A. Tel st Floor, 110/112 Notara Street Fax Piraeus, Greece

2 Secondhand, Newbuilding & Demolition Overview Sale & Purchase: Summer mood VS buying appetite A fully-filled salesboard seems enough to describe last week s overall S&P activity, despite what would everyone expect, as we are right in the middle of the summer, with a considerable number of market players already enjoying their vacations. Multiyear lows in the dry sector have finally led to sharp drop in asset values, with a handful of buyers ready to take advantage of the situation. Taking a closer look, the 2008 built Supramax Bulk Leo seems to have ended up in Greek hands for a price of around $22 mill., with the 2004 built Triton Stork fetching almost the same levels ($21.6 mill.) back in February this year. In the handysize segment, 4 modern units changed hands this week, with New Shipping snapping up the 2011 HMD-built C Handy for $17.6 mill. at an auction, with Greek buyers paying an attractive $18.75 mill. for the 2010 Shin Kurushima-built Global Horizon and German buyers $14.2 mill. for the 2006 Hakodate-built Ocean Harmony. We remind you that, back in April this year, the 2003 built Flex Shine was sold for $15.2 mill. On the wet front, the 2001 built Suezmax Huelva Spirit has found her new recipients, as Middle Eastern buyers have paid $18.75 mill., while Eastern Pacific has paid a total of $201 mill. for the en-bloc acquisition of 5 Aframax tankers built from the Bleinheim stable. Other than that, Euronav paid $11.8 mill. for the 2000 built Aframax Morning Express, while the 2003 built MR Silver Lining has ended up in Greek hands who paid a price of $13.5 mill. and the 1999 built Hellas Endurance in Nigerian hands for a price of $10 mill. Newbuilding: Wet wins second in a row This week we are reporting a total of 25 units contracted, as newbuilding activity has kept faced a sharp decrease of about 30% in terms of total units contracted on a week-to-week basis. Taking a closer look, in the dry sector, The-Hu Cargocean have gone to Sungdong in S. Korea for 1+1 Capesize bulkers, at a price of $57 mill., with Imabari securing an order from Wisdom Marine for 2 Kamsarmax bulker. Wisdom will pay a total of $70 mill. for this pair, with deliveries scheduled for 2016 and Other than that, Polsteam has placed an order for 3 Handysize bulkers ex Zhejiang Yangfan, while COSCO ordered another Handy quartet ex Chengxi for $22 mill. each. Moving on to the wet sector, DSME secured an order from Awilco AS for 3 VLCCs that will cost $97 mill. each. Exmar has gone to Hanjin for a pair of cbm LPGs, paying $45 mill. each, while on the chemical side, Jiangsu Hantong and Avic Dingsheng have secured orders from Sinochem and Nordic Tankers respectively. The Chinese company has ordered dwt st.st. tankers, with Nordic placing its order for dwt st.st. units. Demolition: Market confusion - Pakistan leading A combination of Indian rupee and local steel plate prices falling has led to end users choosing to hold their horses and in most cases not offer on tonnage, with levels facing a considerable decrease of about 20 dollars. Bangladesh followed the same direction with sentiment being negative, as the vast majority of end buyers are getting ready for Eid, one of the biggest holidays of the year, while the monsoon season is paying its role as well, creating difficulties for beaching and cutting. Pakistan was the destination of the week, with local players able to secure market tonnage and local demand for larger units being described as strong. If the current situation in India remains, we would not be surprised if we see even more units end up in Pakistani beaches. China remains well behind the sub-continent in terms of levels and units secured and we might even see levels falling even below local competing markets. On the other hand, local players in Turkey hope that tonnage supply will make its reappearance after the Ramadan, leading to an increase in local activity, which has been limited recently, with local yards trying to secure units in their effort not to cease operations. Enquiries: Interest for tankers holding the index Shiptrade s enquiry Index has remained relatively stable this week, with a slight increase of about 8%, something that could be attributed to interest in bigger tankers. On the dry front, all segments faced losses in terms of buying interest, with the exception of Handymaxes and Supramaxes that remained stable. In fact, the Handysize index decreased by about 18%, with the relevant indices for Panamaxes /Kamsarmaxes and Capes following the same direction (losses of about 14% and 30% respectively). On the wet front, what was surprising this week was the sharp drop in MR enquiries of about 23%. Other than that, interest in Panamaxes remained at very low levels close to zero, however interest in bigger tonnage rose significantly. Suezmaxes were the stars of the week, with enquiries jumping from almost zero levels to 14, with Aframaxes following from 4 to 10. Lastly, VLCC enquiries remained close to zero for yet another week.

3 Top Stories: Shipping, Commodities & Global Economy Here s Why the Price of Iron Ore Has Been Falling The iron ore industry is in turmoil. The price of the key steel making ingredient collapsed to a low of around $90 per ton at the end of June, a near three-year low, although it has since rebounded. Some analysts have blamed this fall on a lack of demand from China. However, it would appear that the price of iron ore is being manipulated in favour of larger producers. Specifically, BHP Billiton (NYSE: BHP) has recently revealed that it is ramping up iron ore production, which will drive the price down and could drive high-cost smaller producers out of business. Controlling the market Last month, BHP announced that it had shipped its billionth tonne of iron ore to Japan. Alongside this announcement the company also revealed that the global iron ore market was significantly oversupplied and, as a result, highcost producers were likely to come under pressure. In particular, Mike Henry, BHP s president of marketing was quoted as saying: [there is] a significant overhang of low-cost supply coming to market in the face of a slow but steady increase in demand it s really important for the high-cost suppliers to shut in a reasonably efficient manner in the face of that otherwise you just see a compounding of supply in the market. Essentially, what the mining executive is saying is low iron ore prices are here to stay, so get used to it. BHP itself is ramping up its production of iron ore, so the company is well aware that it is compounding the supply problem. So, it would appear as if the company is seeking to drive high-cost producers out of the market, a plan which appears to be working well. Indeed, a number of high-cost Chinese iron ore miners have been forced shut their doors for good recently. According to the China Metallurgical Mining Enterprise Association, around 20% to 30% of Chinese iron ore mines have closed so far, taking a large amount of supply off the market. Actually, even BHP itself has flagged the closure of some of its own Chinese iron ore mines amid a program to cut costs. Uncompetitive It s not surprising that so many Chinese producers are being forced to close up shop. According to data supplied by Bloomberg, around 80% of China s mines have operating costs of around $80 to $90 per ton. In comparison, BHP Billiton, Vale (NYSE: VALE) and Rio Tinto (NYSE: RIO) produce ore at around $53, $68, and $44 per ton respectively. But it is not just BHP ramping up supply Rio Tinto and Vale are also ramping up output, compounding the supply problem. BHP Billiton is increasing output by 260 million to 270 million tonnes from a 217 million tonne target in 2014, and Rio Tinto is on track to produce 295 million tonnes of ore this year, up from 266 million last year. The perfect timeit is the right time for these iron ore industry leaders to launch this assault on high-cost producers. Historically, high-cost, unprofitable Chinese mines were kept in business by debt and loans from state banks. However, Chinese authorities have been cracking down on risky loans this year. For example, the China Banking Regulatory Commission warned banks to tighten controls over letters of credit for iron ore imports earlier this year. This is a type of shadow financing which has been used to keep steel mills and traders afloat during times of stress. Keeping steel mills on life support as it were, kept demand for iron ore high; this demand is now likely to evaporate. Other measures have also been introduced to curb excessive risky lending. So, with access to cheap debt restricted, Chinese iron ore mines will have trouble staying afloat. Falling supply All in all, according to Deutsche Bank, around 250 million tons of iron ore is expected to be taken out of the market as high-cost Chinese mines close. Removing this supply could be enough to level out the market. Both BHP Billiton and Rio Tinto are going to dump around 130 million to 150 million tonnes of additional iron ore supply on the market this year. Analysts believe that the demand for iron ore over the same period is only set to expand by 30 million to 50 million tons. However, with Chinese supply dropping out of the market, the balance could be brought back in line, supporting prices. (Source: Motley Fool) Strike at Chinese COSCO-run Greek dock called off A rare strike called at a Greek container terminal run by Chinese shipping giant COSCO has been called off, a union official said on Saturday. Around 150 workers at the main port of Piraeus had on Friday said they would strike until Monday to demand back pay and improved labour conditions. But on Saturday, the head of the federation of Greek port employees (Omyle), George Georgakopoulos, told AFP that agreement had been reached on some of the workers demands and the strike is called off. The workers grievances included low wages, not being allowed to unionise and unclear employment rules on the dock. In 2008, as Greece plunged into a deep debt crisis, COSCO signed a 35-year concession to expand the two main container terminals at Piraeus. It plans to invest $230 million (170 million euros) in expansion works by COSCO s involvement in Piraeus is one of Greece s top privatisation deals, and successive governments have courted Beijing for further investment as it labours to pull out of a six-year recession. Greece and China last month signed investment and trade deals worth $6.5 billion (4.8 billion euros) during an official visit by Chinese Prime Minister Li Keqiang. (Source: AFP)

4 Secondhand Sales Bulk Carriers Sale & Purchase Name Dwt YoB Yard SS Engine Gears Price (mill.) Buyer Bulk Leo Mitsui, Jp 12/2018 B&W 4 x 30 T $22.0 Greek C Handy HMD, Kr 09/2016 B&W 4 x 30 T $17.6 Greek (New Shipping) Global Prosperity Shin Kochi, Jp 05/2016 Mitsubishi 4 x 30 T $16.0 Japanese Sea Bonanza Global Horizon Shin Kurushima, Jp Shin Kurushima, Jp 06/2017 Mitsubishi 4 x 30 T $24.0 Greek (old sale) 12/2015 Mitsubishi 4 x 30 T $18.75 Greek Ocean Harmony Hakodate, Jp 03/2019 Mitsubishi 4 x 30 T $14.2 German (Vogemann) Ocean Fortune NKK, Jp 02/2015 Sulzer 4 x 25 T $3.0 Undisclosed Cleanthes NKK, Jp 08/2014 Sulzer 4 x 16 T $2.5 Middle Eastern Secondhand Sales - Tankers Name Dwt YoB Yard SS Engine Hull Price (mill.) Buyer G Whale HHI, Kr 05/2016 Wartsila DH $60.0 Greek (Olympic) A Whale HHI, Kr 01/2015 Wartsila DH $60.0 (each D Whale HHI, Kr 09/2015 Wartsila DH en bloc) USA (Oaktree Capital) Huelva Spirit Daewoo,Kr 03/2016 B&W DH $18.75 Middle Eastern Sharp Lady Sungdong, Kr 04/2017 B&W DH Smart Lady Sungdong, Kr 10/2016 B&W DH Moon Lady Sumitomo, Jp 10/2014 B&W DH Sky Lady Sumitomo, Jp 04/2018 B&W DH Star Lady Sumitomo, Jp 06/2015 B&W DH $ (en bloc) Singaporean (Eastern Pacific) Morning Express Sumitomo, Jp 06/2015 Sulzer DH $11.8 Belgian (Euronav) Amorgos Warrior Koyo Mihara, Jp 12/2016 Sulzer DH $7.9 Ukranian (Vista) Antipolis Sasebo, Jp 07/2016 B&W DH n/a Chilean (Ultranav) Hellas Endurance HHI, Kr 10/2014 B&W DH $10.0 Nigerian Silver Lining Naniwa Maru No Shin Kurushima, Jp Shin Kurushima, Jp 02/2018 Mitsubishi DH $13.5 Greek 9/2015 Hanshin DH $2.5 Undisclosed Secondhand Sales - Containers Name Teu YoB Yard SS Engine Gear Price (mill.) Buyer MSC Sao Paulo HHI, Kr 04/2017 B&W - $9.5 Greek L Amanda Imabari, Jp 09/2017 B&W - $4.5 Indonesian (Temas Line) Vega Topas Xiamen, Cn 03/2014 B&W - $2.0 Undisclosed

5 Indicative Values - Bulk Carriers Size Prompt Resale 5 years 10 years 15 years Capesize Panamax - Kamsarmax Supramax - Ultramax Handysize Indicative Values - Tankers Size Prompt Resale 5 years 10 years 15 years VLCC Suezmax Aframax Panamax MR

6 Newbuilding Orders - Bulkers Newbuilding & Demolition No Type Dwt Yard Delivery Owner Price (mill.) Comments 5 Newscastlemax Bohai, Cn 2016/7 Berge Bulk $ old deal 1 Capesize Sungdong,Kr 2016/7 Teh-Hu Cargocean $ option 2 Kamsarmax Imabari, Jp 2016/7 Wisdom Marine $ Handysize Zhejiang Yangfan, Cn 2017 Polsteam $ Handysize Chengxi, Cn 2016 COSCO $22.0 Newbuilding Orders - Tankers No Type Dwt Yard Delivery Owner Price (mill.) Comments 3 VLCC DSME, Kr 2016 Awilco AS $ Chemical Jiangsu Hantong, Cn 2016 Sinochem $ LPG cbm Hanjin, Kr 2017 Exmar $ Chemical Avic Dingsheng,Cn 2016/7 Nordic Tankers $ options Demolition Sales Vessel Type Built Ldt Dwt Price ($) Country Comments Vrada Blessing Tanker Pakistan Silva Tanker Pakistan Theresa Antarctic Tanker India Orleta Lwowskie Bulker India CSL Ride Container India + quantity of bunkers Wintec Woodchip Bangladesh City Of Beirut Ro-Ro India T bunkers Amira Nadia Bulker India Roula Bulker Bangladesh Sevenkar Bulker Bangladesh T bunkers Khadiza Jahan Bulker India T bunkers Zhong Shan Men MPP India Tuscarora Belle Bulker Pakistan T bunkers Sakhalin Bulker India Silica II Bulker India Sky Oceanus MPP Bangladesh Mores LPG Turkey Bangkaja GC Bangladesh Indicative Demolition Prices Country Tanker Prices Bulker Prices India Bangladesh Pakistan China Turkey

7 Baltic Indices (Friday Closing Values) 1 year T/C rates ($/day) Dry Bulk Chartering Index Week 29 Week 28 Change (%) BDI ,07 BCI ,70 BPI ,70 BSI ,95 BHSI ,62 Type Size (k dwt) Week 29 Week 28 Change (%) Capesize ,65 Panamax ,83 Supramax ,00 Handysize ,08 Average spot rates ($/day) Type Size (k dwt) Route Week 29 Week 28 Change (%) Capesize Panamax Supramax Handysize F. East - ATL Cont/Med - F. East ,77 F. East RV ,34 TransAtlantic RV ,59 F. East - ATL ,58 ATL - F. East ,32 Pacific RV ,43 TransAtlantic RV ,41 F. East - ATL ,81 ATL - F. East ,02 Pacific RV ,74 TransAtlantic RV ,95 Far East - ATL ,00 ATL - F. East ,20 Pacific RV ,95 TransAtlantic RV ,15

8 Baltic Indices (Friday Closing Values) 1 year T/C rates ($/day) Tanker Chartering Index Week 29 Week 28 Change (%) BCTI ,86 BDTI ,76 Type Size (k dwt) Week 29 Week 28 Change (%) VLCC ,00 Suezmax ,00 Aframax ,00 Panamax ,00 MR ,00 Average spot rates ($/day) - Crude Type Size (k dwt) Route Week 29 Week 28 Change (%) VLCC Suezmax Aframax Average spot rates ($/day) - Products 280 AG - USG , WAFR - USG , AG - East / Japan , B. Sea - Med , WAF - USAC , CBS - USG ,84 80 N. Sea - UKC ,87 80 MED - MED ,80 70 Caribs - USG ,57 Type Size (k dwt) Route Week 29 Week 28 Change (%) Clean Dirty 75 AG - Japan ,43 55 AG - Japan ,01 38 Caribs - USAC ,88 37 Cont - TA ,00 55 Cont - TA ,10 50 Caribs - USAC ,03

9 Exchange Rates Bunker Prices Commodities Key Indicators & Stock Markets Currency Week 29 Week 28 Change (%) EUR / USD 1,3517 1,3598-0,60 USD / JPY 101,33 101,33 0,00 USD / KRW ,79 USD / NOK 6,21 6,17 0,65 Port IFO 380 IFO 180 MGO Piraeus Fujairah Singapore Rotterdam Houston Commodity Week 29 Week 28 Change (%) Brent Crude (BZ) 107,21 107,59-0,35 Natural Gas (NG) 3,88 4,12-5,83 Gold (GC) ,80 Copper ,54 Wheat (W) ,59

10 Shipping Stock Prices - Dry Bulk Key Indicators & Stock Markets Company Stock Exchange Week 29 Week 28 Change (%) Baltic Trading Ltd (BALT) NYSE 5,44 5,38 1,12 Diana Shipping Inc (DSX) NASDAQ 10,28 10,15 1,28 Dryships Inc (DRYS) NASDAQ 2,92 3,00-2,67 Euroseas Ltd (ESEA) NASDAQ 1,15 1,15 0,00 Eagle Bulk Shipping Inc (EGLE) NASDAQ 1,84 1,71 7,60 Freeseas Inc (FREESE) NASDAQ 0,62 0,66-6,06 Genco Shipping (GNK) NYSE 0,79 0,79 0,00 Navios Maritime (NM) NYSE 8,59 8,94-3,91 Navios Maritime PTN (NMM) NYSE 19,26 18,96 1,58 Paragon Shipping Inc (PRGN) NASDAQ 5,24 5,41-3,14 Star Bulk Carriers Corp (SBLK) NASDAQ 11,71 12,00-2,42 Seanergy Maritime Holdings Corp (SHIP) NASDAQ 1,55 1,53 1,31 Safe Bulkers Inc (SB) NYSE 8,55 8,73-2,06 Golden Ocean (GOGL) Oslo Bors (NOK) 9,93 9,90 0,30 Shipping Stock Prices - Wet Company Stock Exchange Week 29 Week28 Change (%) Capital Product Partners LP (CPLP) NASDAQ 11,04 10,88 1,47 TOP Ships Inc (TOPS) NASDAQ 1,86 2,12-12,26 Tsakos Energy Navigation (TNP) NYSE 6,86 6,86 0,00 Shipping Stock Prices - Other Company Stock Exchange Week 29 Week 28 Change (%) Aegean Maritime Petrol (ANW) NYSE 9,75 9,33 4,50 Danaos Corporation (DAC) NYSE 5,97 5,80 2,93 StealthGas Inc (GASS) NASDAQ 11,00 10,88 1,10 Rio Tinto (RIO) NYSE 56,51 54,97 2,80 Vale (VALE) NYSE 14,08 13,91 1,22 ADM Archer Daniels Midland (ADM) NYSE 48,10 47,53 1,20 BHP Billiton (BHP) NYSE 72,07 70,49 2,24