Wednesday, October 29, 2008
TNT Dry Freight Review - 29 October 2008
PANAMAX
=======
An extremely quiet day by anyone's standards today. The Panamax
sector saw rates drop again and owners are balking at operating below
breakevens. Sources reported that better rates, when paid, are due to
the particular needs of the charterer, not to any betterment in the
market. From the Pacific, the Business Standard (India) reported today
that Indian shipowners may be particularly affected by the current
global economic crisis. Dropping freight rates are leading to
cancellations of long-term contracts, and we may see more of the same
as the market problems will likely be extended. The Business Standard
indicated that Indian shipping companies earn about half of their
revenue from long-term contracts. In the same report, i-maritime is
quoted as saying that the average operating costs for a 70,000-tonner
is about $7,000 daily, but current spot market rates are below $5,000
daily. i-maritime CEO Ramesh Singhai was quoted as saying that if
these rate levels persist for 3-6 months, "then 10%-20% of the fleet
will have to be kept idle". Indeed, rates seen today for modern
70,000-tonners were in the $3,000 daily range. The Baltic Panamax
index dropped 66 today to 736.
For Atlantic business, Cargill has taken the 1983-built 64,711 dwt
Alba with October 29-November 05 delivery Genoa for a trip via Brazil
and the Black Sea, with redelivery Skaw-Cape Passero at $4,500 daily,
with optional redelivery in the Far East at $7,000 daily.
The 1997-built 73,606 dwt Omegas reportedly fixed on subjects to
Fratelli D'Amato with spot/prompt delivery Ireland for a trip via
Southwest Pass and redelivery Continent/Mediterranean range at $6,400
daily plus a ballast bonus of $230,000.
Augustea was linked with the 2001-built 73,910 dwt BHP Billiton-relet
Tetien Trader with November 12-17 delivery aps Port Drummond for a
trip with redelivery Mobile at $6,000 daily.
It emerged that the 1997-built 69,614 dwt Torm Baltic fixed to ETA
Dubai with November 01-04 delivery Gibraltar for a trip via east coast
South America and redelivery passing Muscat outbound at $13,500 daily.
In period business, the 1995-built 68,371 dwt CSK Unity went to an
undisclosed European charterer with November 01-05 delivery Piombino
for 11-13 months trading and redelivery worldwide at $11,000 daily.
For the Pacific basin, SSE proved to be the charterer of the
2008-built 77,000 dwt BBL-relet Andrea D'Amato with November 14-20
delivery Aden for a trip via Richards Bay and redelivery Portbury at
$3,000 daily.
SSE also agreed the same rate for the 2004-built 74,414 dwt BBL-relet
FD Gennaro Aurilia with end-October/early-November delivery Mundra for
a trip via Richards Bay and redelivery in the U.K..
The 1990-built 70,424 dwt Mass Glory fixed with Brownstone for October
28-31 delivery aps Goa for a trip with redelivery China at $3,000
daily.
In Pacific period business, Cargill was said to have the 1997-built
73,750 dwt Carola on subjects for prompt-November 07 delivery Taiwan
for 10-14 months trading and redelivery worldwide at $13,750 daily.
CAPESIZE
========
There is no need to look for a straw to break the camels back, the
back of this particular market seems well and truly broken. Concluded
business is approaching nil and reports extremely hard to come by. As
Capesize rates approach breakeven levels, Bloomberg reported yesterday
that Zodiac Maritime may "idle 20 capesize ships". If done, this
represents about 5% of the spot market fleet, according to the report.
Owners are also slowing sailing speeds to cut their fuel
expenditures. If rates drop below that mark, owners will surely
decide that anchoring their ships is the best option. From Forbes
yesterday, word that Brittannia Bulk Holdings, a new arrival to the
shipping market in June 2008, has announced they are posting a large
3rd quarter loss and are now considering liquidation or bankruptcy
protection. The same report indicated that investors fear something
similar from Dryships, Euroseas, and Navios Maritime as their stocks
dropped over 4% yesterday. The Baltic Capesize index fell another 55
to 1345. In the Pacific, BHP Billiton fixed a TBN with November
15-25 loading 160,000 tons 10% coal from Hay Point to Eregli at
$13.00.
The 2004-built Pacific Confidence went to SK Shipping with November
20-30 loading 160,000 tons 10% ore from Port Hedland to Qingdao at
$5.00.
HANDY/SUPRAMAX
==============
The market for Supramaxes and Handysizes softened again today and for
the first time came talk of owners steering clear of the market.
There is so much competition for the business on offer, and charterers
ideas have gotten so low, that "owners incentive to remain in the
market is all but gone". There was talk that in the Atlantic, US
Gulf/north Africa business was being touted at $8,000 daily or under,
although details have yet to surface. Pacific business was very quiet
today, with little concluded business heard done. The Baltic Supramax
index fell 46 to 655, while the Handysize index was off 22 at 368.
>From the Atlantic, a South Korean charterer reportedly took the
2008-built 53,300 dwt HMM-relet Yin Ning with November 08-12 delivery
in the Mississippi River for a trip with redelivery in the Far East at
$10,000 daily.
The 2001-built 46,492 dwt Danos Z has gone to Oldendorff with November
13-16 delivery Conakry for a trip with redelivery in the Black Sea at
$5,250 daily.
Out of the Pacific, MUR was the charterer of the 1994-built 45,232 dwt
Konkar Theo with November 10-15 delivery Singapore for a trip via
Australia and redelivery in the US Gulf at $3,000 daily
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