The shipping markets: Down and out?

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John Faraclas

John Faraclas

Our nineteenth weekly recapitulation of the shipping markets, their respective main indices and world geopolitics affecting same in 2015 and beyond, tonight Friday the 8th of May 2015, with John Faraclas of AllAboutShipping in Athens.

  • The BDI was up just a point since yesterday at 574 points which is 13 points down since last week’s 587 points – 13 points down yet again, since a fortnight ago when it stood at 600! Uncertainty at its best!
  • The BCI 2014 moved up 22 points at 616 since yesterday and 42 points since last week’s 574 points! A seasonal correction? A …”demanding” issue?
  • The BPI was down nine points at 594 since yesterday which is 31 points down since last week’s 647 points. More tremors… Let’s see what happens after the opening of the new Panama Canal. This issue and the Panamax-size, post Panamax-size etc will create many problems in the future; add the Nicaraguan possibility of another canal in the region, and see for yourself what will happen in the Panamax size. In our view, both good and bad results; all it matters though is how you are structured!
  • The BSI remained once more steady at 618 points but was down three points since last week’s at 621 points. Stable downfall…
  • The BHSI was down two points since yesterday at 329 points which is 11 points down since last week’s 340 points!

Very simply a dropping dry market; one can hope for more scrapping, but what about the book values? Can the banks afford write-offs? I guess as technology improves and in order to avoid more pollution to the environment and reductions in the DRCs, new ships will be built, the “eco times two” and so a social upturn will be avoided, you know what I mean. May I ask the gurus of Shipbroking as well as the market analysts for their advise for when they foresee that the markets will improve and go just above the 2, 000 points mark on the BDI? 

Again, a “different” story for the wets:

  • The Dirties and its BDTI index was up three points at 774 points which is 20 points up since last week’s 754 points!
  • The Cleans and the respective BCTI was up just one point at 623 points which is 17 points up since last week’s 606 points.
  • How the price of oil, with or without sanctions will affect the wet market fixtures, earning in particular? How the Pipelines, above ground and under the oceans affect the trade and Peace on Earth, conversely the freight rates?

Once again this is still a good time to enter and or acquire tonnage if you can afford to keep same – afloat, idle or injecting money every day for two years…until the market turns up! Shipping, as we have said many time before, becomes Shipping for the few and soon of the very very few…

Another mess in geopolitics; things are going worse:

  • Ukraine: Tomorrow 9th of May in an important day, an anniversary; what can happen if it happens? The fighting continues, many foreign elements are in Ukrainian soil and who can stop Putin’s appetite defending the Russian geopolitical strategic interests? Despicable things happen. In some cases survived sufferers have no option but to suicide… Transparency on the other hand is the name of the game and for internal peace and security, as corruption since the fall of the Soviet Union has shaken the country to its foundations; caution!
  • The Greek saga, continues and given the first 100 days of the SYRZIA/ANEL in power, one really wonders what is yet to happen, unless Alexis Tsipras, the Greek Prime Minister of this governing coalition, cuts the knot! His lefty loony will ground him and Greece too! He has the chance to save Greece from a disaster, but with all these Flabouriaris’ and nomenclature…, one day, sooner or later, he will rock the boat! This pathetic continuation of the “negotiations”, the “red line” limits of SYRIZA’s pre-election promises, looks as the looming disaster waiting to happen… Please see our previous reporting on Greece as well as previous references in past weeks/months/years in this column and re-charge your judgement. Hope a new force will come in and change all these nonsense. After all, Drama, Tragedy and Comedy are all Greek words and inventions…the political systems too; never forget this!
  • The Migrants tragedy continues particularly in the Med region and the outcome will be more sufferings. It is about time Europe’s politicians give a proper end and solution to this despicable situation, which, by the way, it is not just the product of conflict (from North West Africa to Afghanistan)! Penalise the countries allowing the inflow of migrants to Europe, and then tell us…
  • The UK Elections offers the chance to seat and repose given the overwhelming triumph of David Cameron’s win and the Conservative Party making waves, sending also shocking waves across Europe! The mother of all Democracies, that is Greece, should carefully study what happens in the Mother of all Parliaments, that is the United Kingdom! Ah! and see the resignations of political persons, whilst in Greece, inferiority complex suffering “leaders” still wish to hold on…
  • The Nepal Earthquake disaster resulted in thousands of human losses, unaccountable/missing people and great number of displaced people.
  • We repeat that the nasty situation in Baltimore, USA that we all witnessed, is an alarm of what might happen again. Returning to normal situation, needs to be explained. A long term “peace”, co-existence and reasoning must take place!
  • Africa’s turmoil continues: South Sudan in yet another mess;  Nigerian students targeted by Islamists; The Ivory Coast eight year old boy trying to get into the EU in a suitcase, show the Migrants issue (raised many times in our Friday reporting, as well as above today) is making …waves! Add all Africa’s issues (Somalia, South Africa etc etc, and see what you get). On top of all these, add Federica Mogherini’s proposal to …short out the Libyan saga. She’s absolutely correct! She must also insist this for Turkey too; there is no civil war there, so why on earth the EU cannot end this…
  • North Korea is testing our patience and China expansions will create a Japanese response… India must resurface as a superpower and create a balance there. Coming back to China, China must also get its act together, as the there is a slowdown in its economy and its exporting policy will soon create, not just an economic war, but far beyond that…
  • Add the Energy issues, pipelines etc etc… The EEZ will also create havoc in the Mediterranean!
  • Environmental Regulation too influence the markets…
  • Shipfinancing is in a mess too… The shipping bankers have got it wrong all together… Look at the state of their portfolios and involvement in the field… As for the Funds and in particularly the so called Shipping Funds, don’t ask me…
  • Tax matters… Wrong tax ideology … Indeed we all have to pay taxes, but proportionally! There are also limits; its best to have your own money in the bank and finance your new ship-acquisitions than to borrow money…Its is pathetic to tax shipping bank deposits! The shipowning companies are right on this issue; the states and the banks are wrong!
  • The Anniversary of the end of World War Two, 70 years now, must be the issue people should reason; the architects of World War One’s peace treaty and their offsprings today should come down to their senses before they come down to their knees. It is also 35 years ago since the Moscow Olympics (1980) remember… Now many countries, heads of states in particular, will boycott the parades in Moscow, like they did in 1980 after the insistence of US President Jimmy Carter and 65 Nations didn’t participate, except athletes who believed in the Greek Olympic Ideal and competed under the Olympic Flag’s protection and cover, due to the war in Afghanistan… Remember also the Soviet …”tit-for-tat” in the 1984 LA summer Olympics… Shame for both blocks spoiling the Hellenic Olympic Ideal! Now it is to boycott the parade due to the Ukrainian issue… Come on guys, wake up… If you have other, I mean second thoughts, why then you didn’t let General George S. Patton finish the job….?
  • EXPOSEC in Athens early in the week was an excellent opportunity to hear some home truths as well as international developments on this front. Pleased that we were also part of a Q&A debate, and we really thank all those who come and recognised our stance on the issues confronted.
  • The NAFTEMPORIKI event too we hear it was great, but as usual its marketing departments should extend invites internationally; with all due respect, it is not just the first time.

Coming up:

  • The London Shipping Law Centre’s forthcoming event Sanctions and Shipping – Where are we now? – 18th May at Clyde & Co will offer all the very best on the issue!!! Log on our respective UPCOMING Events sector or at the LSLC banner on top of the site’s page, and book your participation.
  • INTERTANKO’s 45th Anniversary with a super Conference on 19-22 May is coming up, as well as other events in Athens.
  • ESPO 2015 in Athens 21-22 May…
  • Again, check our UPCOMING Events button on top of this page…

Greece and its Islands are waiting to see firstly the European holiday makers and then those from all four continents enjoying their time of their lives. As said in our last report, visit the United Kingdom too which offers a great variety of holiday choices given the favourable climate change too!

Viewers can also listen to the live video here below:

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