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BALTIC INDEX DOWN FOR THIRD STRAIGHT DAY

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, declined for the third straight day on Wednesday on lower rates across all vessel segments.

The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, was down 20 points, or 2.04 percent, at 960 points. The capesize index declined 42 points, or 2.57 percent, to 1,590 points. Average daily earnings for capesizes, which typically transport 150,000-ton cargoes such as iron ore and coal, were down $377 at $11,737. The panamax index dropped 31 points, or 3.24 percent, to 925 points.

CHINESE IMPORTS MORE IMPORTANT FOR DRY BULK FORTUNES

Sometimes numbers are hard to resist, as they more often than not, tell the truth. In the case of dry bulk shipping, the undeniable truth is that, demand-wise, Chinese imports remain the most important determining factor behind the freight market’s fortunes.

According to the latest economic data, Chinese imports increased year-on-year 38 percent in February, 20 percent in March – which is approximately $160-170 billion – whilst in April they failed reaching market estimates which were at 18 percent rise and remained at 12 percent rise year-on-year to $142 billion.

VENEZUELAN CRUDE SUPPORTING TANKER MARKET

Venezuelan crude is supporting the tanker market, contrary to what one would believe. In its latest weekly report, it is said that back in 2012 the then president of Venezuela, Hugo Chavez stated that his government planned to more than double the country’s oil production to 6 million b/d by 2019.

The plan included further diversification of its crude oil exports, with the aim to export 2.2 million b/d to Asia, 1.25 million b/d to Latin America and the Caribbean and a further 1.7 million b/d to North America and Europe. OPEC’s listing of oil reserves places Venezuela in pole position, with 300 billion barrels of proven reserves, almost a quarter of the OPEC total. So, at that time perhaps this was a realistic aim.

PRESSURE IS ON FOR LARGE TANKERS

Large tankers have been under pressure over the past few weeks and this proved to be the case during the past days as well.

It is said that VLCC rates remained under negative pressure this week as demand in both the Middle East and West Africa markets posted w/w falls while the extent of the May Middle East program appeared likely to conclude below earlier expectations as Suezmax demand surged, leading to weaker VLCC fundamentals.

There were 17 fixtures reported in the Middle East market, representing a 32 percent w/w loss, while the West Africa market observed five fixtures, off 29 percent w/w.

 

CONTAINER TURNOVER AT HK PORT MOVES HIGHER

Statistics from the Hong Kong Maritime Port Board showed the harbor handled 1.74 million TEU in April, representing a year-on-year increase of 10 percent.

The container turnover of the port of Hong Kong increased 12.7 percent year-on-year to 66.58 million TEU in the first four months of 2017. Singapore’s Maritime and Port Authority reported a 7.5 percent increase in container movement in April, having handled 2.72 million TEU. This brought first four months container throughput to 10.33 million TEU.

The Shanghai International Port (Group) Co (SIPG) recorded a 4.9 percent jump in year-on-year container volume to 3.28 million TEU.

TANKER MARKET SENTIMENT WEAKENS THIS MONTH

In April, tanker market sentiment weakened in both its dirty and clean sectors. According to the latest oil market report from OPEC, average spot freight rates dropped on most reported routes.

Dirty tanker freight rates were down 4 percent from the month before. Despite a stronger market seen in the VLCC sector marking the only exception in the month as its freights edged up on all reported routes reversing two consecutive months of declines.

VLCC spot freight rates showed improvements, rising by an average 20 percent on all reported routes, as a result of enhanced activity in the market and a tightening in tonnage supply.

SINGAPORE CONTAINER VOLUMES INCREASE

Singapore has handled higher container throughput in April compared to the year-ago volume.

The port of Singapore registered throughput of 2.72m teu last month, an increase of 7.5 percent compared to the volume of 2.53m teu in April last year.

In the first four months of this year, Singapore port moved a total throughput of 10.33m teu, a rise of 4.1 percent compared to 9.92m teu in the same period of last year.

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