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BALTIC INDEX DOWN FOR 11TH STRAIGHT SESSION

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, fell for an eleventh straight session on Wednesday as rates across vessels segments weakened.

The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, was down 39 points, or 3.63 percent, at 1,034 points, its lowest in nearly two months.

The capesize index fell 126 points, or 7.55 percent, to 1,542 points. Average daily earnings for capesizes, which typically transport 150,000-tone cargoes such as iron ore and coal, were down $758 to $11,840. The panamax index also fell for a tenth straight session and was down 44 points, or 3.86 percent, to close at 1,096 points.

INDIAN MARITIME INDUSTRY — ON THE CUSP OF REVOLUTION

There are two geographical factors that put the Indian maritime sector at an advantageous position – the vast coastline of 7,500 km and the strategic location along most major shipping highways.

For years, the maritime routes have been used for trade and a show of strategic strength. Presently, the country boasts of a modern shipbuilding and shipping sector, replete with all the variables necessary for overall industrial growth. Combined, these factors provide a strong basis to attract big investments in the Indian maritime sector.

SOUTH KOREA’S SHIPBUILDING OUTLOOK IMPROVES

Despite stagnation that has been plaguing the global shipbuilding industry over the past few years, Korea’s big three shipbuilders — Hyundai Heavy Industries, Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering — have managed to rake in surpluses this year.

On the surface, the country’s top three shipbuilders appear to show signs of recovery in the first quarter, as they landed major ship order receipts, looking to overcome the global shipbuilding financial slump. Last month, Korea’s shipbuilding exports reached $7.1 billion, a spike of 102.9 percent compared to April 2016. The WCI reported average freight rates fell to a record low of $701 per 40-foot shipping container in March, recording the lowest rates since 2011.

ASIA FUEL OIL PREMIUMS ENLARGE GAINS

Asia’s 380-cst cash premiums extended gains made in the previous session to reach a four-month high on Wednesday trade, lifted by persistent bidding interest amid reducing stocks after weeks of aggressive supplier offers in the Platts price assessment window.

Meanwhile a shortage in prompt supplies of blend stock has boosted viscosity spreads and prompt-month 180-cst fuel time spreads as blenders seek cutter supplies.

On the Intercontinental Exchange (ICE), time spreads of 180-cst fuel oil for the May/June contract jumped $2 a ton from Tuesday’s settlement, trading at $3.75 a ton. The May visco spread, the differential between the price of 180-cst and 380-cst fuel oil, also rose sharply to $9.50 a tone on Wednesday, up $2.25 a tone from the previous session.

PACIFIC AND EUROPEAN NATIONS DEMAND SHIPPING MAKES TOUGH CO2 CUTS

A coalition of Pacific Island and European countries have agreed to work together to ensure the UN’s International Maritime Organization delivers an ambitious climate deal for shipping.

Ministers meeting in Tonga last month formally endorsed the work of a High Ambition Coalition for shipping ahead of IMO negotiations in London next month.

The group – which includes the Marshall Islands, Tuvalu, Tonga, Germany, France and Denmark – intends to ensure IMO provides its contribution towards the Paris Agreement goal of guarding temperatures to well below 2 degrees and aiming for 1.5 degrees Celsius.

 

SINGAPORE BUNKER FUEL TERM SIGNED AT $2.25-$2.50/MT PREMIUM

Singapore ex-wharf 380 CST bunker fuel term contracts for May have mostly been concluded at premiums of $2.25-$2.50/mt to the Mean of Platts Singapore 380 CST high sulfur fuel oil assessments.

This compares with premiums of $1.25-$1.50/mt to MOPS 380 CST HSFO assessments for April term supply contracts of the same grade of bunker fuel.

Initially offers were at $2.25-$2.50/mt when deals were concluded at $2.25/mt, but more recently offers have been heard around $3/mt and [deals] concluded at $2.50/mt. The spot ex-wharf 380 CST bunker differential to MOPS 380 CST HSFO has tracked the rise in cash differentials for 380 CST fuel oil cargo since end March. The average daily spot cash differential for the mainstay 380 CST HSFO market stood at a premium of 98 cents/mt in April, up from an 80 cents/mt discount in March.

CONTAINERSHIP MARKET STAYS ACTIVE

It has been another very active week for the containership market with several of the recent news related to Greek tonnage providers.

Navios Maritime Partners LP, with exposure both to the dry bulk and containership sectors, plans to acquire the remaining containership fleet of Rickmers Maritime.

As the Singapore-based owner failed to secure a restructuring agreement with its creditors, fourteen of its containerships fall within the 3,400 to 4,250 Teu range.

On average, the vessels are close to 10 years old and the understood combined price of the deal exceeds US dollar 112 million.

Navios Partners will finance the acquisition through a $20 million equity investment and an additional secured loan. Several closing conditions have to be met before the deal is finalized. Five 4,250 Teu ships currently chartered by MOL will be transferred mid of next month, with the remaining nine ships to follow some weeks later.

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