Shipping confidence at highest level for three-and-a-half years
Shipping confidence held steady at its highest rating in the past three-and-a-half years in the three months to end-November 2017. The average confidence level expressed by respondents was unchanged at the level of 6.2 out of 10.0 recorded in the previous survey in August 2017.
Confidence on the part of charterers was significantly up, from 4.7 to 7.7, the highest rating recorded for this category of respondent since the survey was launched in May 2008 with an overall rating of 6.8. Managers (up from 5.8 to 6.1) were also more optimistic, while brokers’ confidence was unchanged at 6.3. The rating for owners, however, fell from 6.5 to 6.4.
Demolition market looking for more deals
With the dry bulk market on recovery mode, ship recycling yards and cash buyers are scrambling to attract more deals. It is said that there certainly appears to be some division between what some of the cash buyers are offering and the resale levels from the actual recyclers.
The recent increase in rates has been maintained this week resulting in a very interesting sale. The VLCC “Plata Glory”, 38, 361 ldt achieved a credible USD 438.00 per ldt basis delivery full range Indian subcontinent, gasfree for hotworks.
Capex needs far exceed combined market cap
The global newbuild ship orderbook has fallen to a historical low of 10 percent but the global shipping industry’s US$231 Billion CAPEX requirements remain enormous and far exceeds the combined US$191 billion market capitalization of all the world’s listed shipping firms. In 2018 alone, the global shipping industry will need US$114 billion capital to fund the newbuild ship deliveries. Asian countries are the largest ship buyers and will need to fork out nearly 40 percent of this CAPEX.
Re-cycling: taking a tour around demolition trends
In 2017 so far, as some sectors have begun to move away from the bottom of the shipping market cycle, demolition levels have declined year-on-year. However, with a range of factors at play, many believe recycling volumes are likely to remain at elevated levels in the medium term.
This month’s Shipbuilding Focus takes a look at how recent demolition trends have panned out across the key sectors. From 2007 to 2009, annual demolition increased five-fold in tonnage terms to 33.3m dwt, against a backdrop of sharply declining earnings. Recycling activity has remained elevated since, reaching 58.4m dwt in 2012, the highest annual level on record. In the year to date, 743 vessels of a combined 32.7m dwt have been sold for scrap.
Cosco shipping ports volume growth slows down
China’s major port operator, Cosco Shipping Ports (CSP) saw container volume growth momentum slow down towards the end of the year with overall throughput in November rising 8.9 percent to 7.52 million TEU from 6.91 million TEU in November 2016, driven by solid performance at its overseas ports and the newer southeast and southwest coast ports.
CSP’s overseas ports saw volume soar 42.1 per cent to 1.85 million TEU from 1.30 million TEU in the previous corresponding period as its European terminals in particular did well while key Asian terminals in Singapore and Busan also saw good growth.
More scrapping may lift oil tanker rates in 2018
Oil tanker firm Frontline expects shipping firms to scrap more old vessels which may lead to a recovery in rates for the remaining global fleet in the second half of 2018, its chief executive quoted as saying last week.
Spot rates for very large crude carriers (VLCCs), with a capacity to transport 260,000 tones of oil, have recently dropped to a loss-making $13,000-14,000 per day, far below Frontline’s cash breakeven rate of $21,600. Spot rates for the smaller Suezmax vessels are also below Frontline’s cash breakeven level, as the supply of new ships has outgrown the rise in global oil demand.
South Korea’s 380 CST bunker fuel price hits 3-year high on tight supply
The price of 380 CST bunker fuel in South Korea hit a three-year high Tuesday amid tight supply. At the Asian close last Tuesday, 380 CST bunker fuel for delivery in South Korea was up $5/mt day on day to be assessed at $411.50/mt, the highest since December 10, 2014, when it was assessed at $414/mt.
Multiple suppliers were heard to be running low on bunker fuel inventory as peak winter season demand this year has exceeded expectations. Traders said the country’s refineries were heard to have no plans to increase production.
A few suppliers were heard have imposed daily sales limits until replenishment cargoes arrive at the end of the month. Given the high prices in South Korea, market participants had expected some displacement of bunker fuel demand from South Korean ports to Hong Kong. This large price spread between South Korea [and other regions] has never been seen before. However, suppliers in neighboring ports said they had yet to see a noticable increase in demand, according to S&P Global Platts reports.