Caution for the markets as volatility is here to stay

Airline Industry, Aviation, Chartering, Conferences, Seminars, Forums, Environment, Events, Exhibitions, HR, IMIF, Markets, Military, News, Oceanology, Ship Demolitions, Shipfinance, Shipping Indices, Trade and Commerce, WISTA - Women in Shipping — By on March 14, 2014 at 11:59 PM
John Faraclas

John Faraclas

Did I hear you say Volatility? Volatility in all fronts! The World is still on the edge and market volatility creates further uncertainty!

The Allaboutshipping.co.uk’s tenth overview and recap of the Shipping Markets and the World’s various situations  for 2014 with John Faraclas:

As I have numerous times stressed, volatility can create havoc and this is happening right now. This was a strange for many, natural for me week. The BDI still down 750 points (widening the gap since last week’s 638) from the 2, 227 – the last closing of 2013, which is nearly 34 centum down; still this percentage speaks of itself just over two and a half months, given again the case of the Capers’ behaviour! Overall the Capes closed down to 2, 677 points up 23 from yesterday, but down 303 points since last week! What a volatile market!

The BDI closed earlier on this afternoon at 1, 477 points from the 1, 543 points of last Friday’s closing, down 66 points!

The Capes as said above pushed the general index up, but also down creating havoc in the markets!

The Panamaxes and their respective index closed at 1, 113, up 7 from yesterday and overall up 38 since last week.

The BSI was at 1, 183, up ten since yesterday and  plus 52  since last week’s 1, 131. The BHSI was up 3 points since yesterday and plus 8 since last week. Nothing much to celebrate on the dry market. Be on alert!

The wets continued the overall downfall with the BDTI down to 679 minus 2 since yesterday and down 8 since last week’s 695 points. The BCTI, the cleans at 676, same as yesterday, but up 53 since last week’s 623! Hurray!

On the geopolitical front Ukraine still produces tremors with more to come and wonder what will be the modus operandi in the import export status in the region.

As you will hear in the live video at the end of this recapitulation on the markets, we have asked  during the  week (11 March 2014), two specialists in the field with 50 plus years of  experience in the markets, the following question: With the current state of the World Economy, the low BDI, the low wet indices and in general the low markets irrespective of the plus points in the indices lately, as well as the overcapacity and other factors(energy, geopolitics, shipfinance issues, Ukraine et al), what is the forecast in the Shipping Industry for the short and long run?

Derek Prentis, MBE, The Father of the Baltic

Derek Prentis, MBE, The Father of the Baltic

Derek Prentis, the father of the Baltic as he is known, came the next day (12 March), to say: ” The market is a bit confusing, today the Cape rate has gone down 445 points, when yesterday a  3 to 4 months fixture was done at Dollars 35, 000 a day.

The reports that I had concerning the mainstays of the market. The Chinese would maintain their Ore imports to 775 Million a year and their Coal imports would go up to 440 million ts.

One can see that with the number of New Buildings it is likely to have a reducing effect on the market.

I regret to say that we will see a drop in the market this year but I expect it will pick up again middle 2015″.

Jim Davis CBE, Chairman of IMIF

Jim Davis CBE, Chairman of IMIF

Jim Davis, the Chairman of  the International Maritime Industries Forum (IMIF) came the next day (14 March) to say:  “Sadly there is no encouraging news to tell of the current state of the Shipping Markets.  Overtonnaging remains stubbornly in place in all sectors and this inevitably leads to poor freight rates.

Containers: Despite the overtonnaging, the major lines – notably the dominant Maersk – are still introducing bigger and new tonnage exaggerating the problem.

Tankers: No special development with plenty of ships competing for employment at, for VLCC’s, rates at knock-down rates around the $10/$12000 per diem mark.

Bulk: Once again a dreary market, only slightly better in the smaller sizes.

Demolition: The number of older ships going to the scrap yards continues to grow but there is far to go.  I have earlier proposed that shipyards – who long to produce newbuildings – should take an active interest in the demolition market.  This could take the form of an active P.R. campaign against polluting “gas guzzlers” and pushing the economic as well as the ecological benefits of modern tonnage.  I have yet to see much evidence of this nor of my other suggestion of a marketing campaign embodying a “trade in” component a la automotive industry.

Slow Steaming: This has now become accepted practice – most importantly in the container trades – and the industry is steadily converting to the “pipeline” concept for Seaborne trade.  A healthy sign.  The fuel saving will moreover mean a further reduction in CO2 emissions to the approval of the ever more powerful “Green” lobby.

Final Comments: There is still so much uncertainty in the world politics that it is hard to forecast much early change.

My own view is that prescient owners should remain ultra cautious and not be drawn into the old over optimistic view that we are ‘bumping along the bottom’ providing an unrepeatable chance to jump in with new or newly acquired tonnage.”

Europe continues to be in a mess and the world at large too; just imagine the world is on a US$ 100 (onehundred) million debt!

P1310140On a positive note the three-day biennial Oceanology Conference and Exhibition event at London’s ExCel was more than a success and the world focuses more and more on science and technology, needless to say that the focal point will be the exploration of any kind and obviously the many “disputes” that will arise, as usual out of all this. Humanity goes mad, and will spend more and more for people to be killed, as Tony Benn, who passed away today at 88, said once upon a time that “If we can find the money to kill people, we can find the money to help people”.

The Malaysian airplane saga is very upsetting and our industry is very sensitive on these issues given the great number of crew members that travel to join ships or return back home as well as all the executives, office personnel that travel too and it is very disturbing to listen to nonsense. In this day and age nothing vanishes from radars; came on guys… Shame! We will eagerly wait to hear what happens. Being a believer in Nemesis, if something sinister has happened, sorry, Nemesis must strike all!

The CMA, the major event at the other side of the Atlantic begins on Monday the 17th of March for three days at the Hilton Hotel in Stamford Connecticut and will see many of the famous there. We will keep you closely posted as Jean Winfield from Jeanius Consulting  – our collaborators, will report; watch this space.

From the WISTA-Hellas Dinner Dance 2014 event

From the WISTA-Hellas Dinner Dance 2014 event – photo courtesy Regina Faraclas

WISTA-Hellas successful Annual Dinner in Athens Ledra Hotel just ends as we end this report; over 400 were there!

Ending this brief news bulletin we remind you the Greek Shipping Hall of Fame event, The London Event at the Park Lane Hotel on the 24th of March, is just ten days away and if you don’t want to be disappointed, book now from the respective page in this site, administration@greekshippinghalloffame.org

Wishing you a happy weekend and be on guard for the multiple of developments surrounding our industry.

Do watch the video herebelow and send us your commnets:

Tags: , , , , , , , , , , , , ,

Leave a Reply

IMPORTANT! To be able to proceed, you need to solve the following simple math (so we know that you are a human) :-)

What is 5 + 9 ?
Please leave these two fields as-is:

Trackbacks

Leave a Trackback