Shipping: All change? Markets and geopolitics falling apart…

Energy, Environment, HR, Insight, Markets, News, Shipfinance, Shipping Indices, Statistics, Stock Markets — By on October 14, 2016 at 9:06 PM
John Faraclas

John Faraclas

Despite the Panamaxes “rally” the BDI closed just seven points up at 892 points which is MINUS 29 since last Friday’s 921 points; Geopolitics will produce tsunamis of 30 meters high… John Faraclas’ weekly Markets and Geopolitics recap:

The Capers remained stuck at 2,018 points as if a Deus ex Machina …lift them up to the surface following yesterday’s fall of 136 points; on a weekly basis the BCI 2014 was DOWN 227 points since last Friday’s 2,245… Volatility, uncertainty, pressure… well, time will tell, but we reiterate the view that there isn’t much steam in the market!

The Panamaxes’ was the only size with a GOOD PLUS of 29 points, going over and above the 800 point mark at 819, but also a good weekly plus of 102 points for the BPI from last week’s 717 points. We repeat our preference for this size, pro and post Panamaxes included – if they are geared with 40plus tonnes cranes, the better!

The Supras’ BSI was just one point up since yesterday at 674 but MINUS three on a weekly basis from 677 points.

The Handies’ BHSI gained just one point since yesterday and now reads 411 points, the same as per last week’s closing!!

So all in all we are heading a bit downwards in the Dry Markets, but at least we are not in Febs bottom levels below the 300 point and obviously far apart from Decs 2013’s 2,274 points…

The Wets on a “rising mood”; the last published BDTI (Dirties) and BCTI (Cleans) stood at 657 – up 16, and 385 – up 18 points respectively. On a weekly basis both Dirties and Cleans were up 38  and 35 points (619 and 350) respectively. There is slight hope of better days, given also an expected cold winter in many parts of the Northern Hemisphere; we shall see,  as the energy jargon might create another upheaval both from geopolitics and sheer economic reasons…

Demo prices vary from US$ 180 to US$ 300 per lt in Bangladesh, China, India, Pakistan and Turkey; not bad for the purpose…

Newbuilding prices are very low indeed and might go even lower. “Employing irony”, we can see the Market’s and Shipowners’ revenge… Given the high bubble prices prevailed from the scam Shipyards, Shipbrokers and Ship-finance entities set up for a long time, it was about time to see the price and punishment and the buyers’ market prevail.

Second hand prices are still very good, but obviously depends not on the characteristics/vessels details, but on the condition of the vessels in question. It goes without saying that the financial obligations of ships are also a burden… Still it’s best you lose your finger than your arm, and in the situation we are now, lose your life; ships might go for a piece-meal… It has happened before!

A lot of problems appear and do please add the restructurings, the shipyards collapse – it was the Feast’s turn, the bankruptcies, the changes at the helm of listed companies, the lack of funds, banks and others trying to get rid of their shipping portfolios, some scandals looming in the background, needless to ask you about the influence of Geopolitics (which include all financial aspects) and tell us what do you think is happening…

One important aspect is for all companies how they performed with the KPI’s on the Risk Assessment Field, a sector few had the knowledge and capability how to counter. As things stand we must also see how the academia behaves and will in the very near future behave vis-à-vis the curriculum on issues being taught there, such countering on any risk! It’s the same that we have stressed that all, repeat all in the industry, if possible to have a training on board ships; end of the story…

Never forget the cost for the environmental rules; an issue of paramount importance… Indeed we have to preserve the environment, but too much over-regulation and too quick approval of maritime equipment for this purpose, is too much within the time frame the “regulators” press for…

It is great to attend all these dozens of Conferences, Fora, Symposia and Debates and listen to the experts and stakeholders, but none will tell you what you have to do it!! It’s like in academia: the Tutors teach the right thing to do per the curriculum, but do the students do the right thing during their professional career? How does academia tackles greed… Simply, take it from me: Nobody will ever tell you the truth of his/her success – forget the remedies etc., etc… Wake up! Grow up and learn to navigate in turbulent waters, otherwise don’t endanger others: banks, insurers, suppliers and above all seafarers! Having said this, we can fear the hard times ahead for Hanjin’s seafarers; don’t let them down!

Despite all the above and whatever happens with the unbelievable Geopolitics – existing and those, unfortunately, due to come, this is the best ever time to acquire new tonnage, particularly newbuildings of any kind.

On the Geopolitical front now:

The MIGRANTS saga, although it appears on a low profile in the media, it has gone worse. Still Greece and Italy, the biggest …recipients from all – particularly on stage one, have incalculable problems to tackle which we have referred to in the past and winter time will prove a nightmare; Europe too at large is faced with these despicable problems produced by its naff politicians, diplomats and Brussels incapacity to produce the right solution – Not just a solution. If the European Union and European Nations in general  cannot agree on the appropriate solution, then what… Add Turkey’s blackmail and see what you get and what is yet to come. Indeed we all recognise that there are still four million of Migrants on Turkish soil, basically from Syria, Afghanistan and Pakistan, but it is Turkey to blame not just for allowing them to enter, but sending them over to Europe and in this despicable and unethical way take a revenge frpm EU not accepting its entry! There are also another four million on the Northern African coast , basically from Libya, Eritrea, Ethiopia, Somalia, Sudan… Looks likely that in Calais the unaccompanied  children will be send over to the UK before the “Jungle” is closed down, by the end of the year, as president Hollande declared… Nearly 300 children hope to join relatives in Britain…

MIGRANTS dignity must be maintained though, they are humans, and they must be protected from traffickers and others.

Syria gets worse all the time. Will Washington sacrifice Aleppo? Will young Assad consolidate victory after Aleppo’s capture or things will go worse for all and an all-out war is fought not only in the Middle East but beyond its periphery? What’s the end game for Russia’s president Putin? The UK, France and Germany together with their allies will they confront the Russian bear? Russia, the super power “after” the Soviet Union’s collapse and the destruction of the Iron Curtain, is NOT a Communist affair anymore, so what’s the trouble? Well, many in Capitol Hill must recognise that the international public does understand that the threat is NOT from Communism, but from another super-power who will not back-off as many believe. We need though Mr. Putin to reveal his intentions as we had enough! We all know the importance of energy and the pipe lines, The Pipe Lines of Peace as we have mentioned in a previous report just recently and we all accept that Russia is the biggest energy exporting hub, but there are other strawberry trees; there are other sources of energy and I guess we all work towards these and their use as if we use these Alternative Sources of Energy, very simply big money will change hands – private, public or state ones!

On Ukraine and Crimea one must never forget who has the upper hand in this particular region. A new Russian – Indian defence deal is about to be signed in Goa involving the S-400 advance air-defence system and interestingly a BRICS summit will also take place this coming weekend… In Kashmir though we had some hiccups yesterday. CAUTION!

Be careful and thoughtful on the Russian – Turkish affair; it smells trouble for all… particularly with the Pipelines of Peace mention above…

The American presidential race for the White House is the worse ever in its history;  Donald Trump melodrama with so many women “involved” and the latest sex assault allegations tells of the diminishing values in the American society. Hillary Clinton on the other hand faces the email syndrome and other issues… Whatever happens it will be serious. Planet Ocean expects the election / win of a real leader. Putin’s dislike of Mrs. Clinton pointing to war is a very serious case… if she’s elected.

BREXIT continues to send shocking waves all over the world and it remains to be seen what course of action Mrs. May and her team will follow… The pound is down but NOT out. Many tourists come in and many exports are the success story so far… Poor Europe. The falling pound creates an inflation which has to be appropriately monitored. This was the week of the weak pound, but we shall see the end result of this BREXIT process and how same will affect not just the pound but many leading currencies in particular. One thing I must tell you is that I dislike the way the European Union leaders see the British story, now a fact called BREXIT… Meantime today marks the 950th anniversary of the Battle in Hastings in 1,066! A cataclysmic event for the entire United Kingdom…

Greece is going through another difficult period, a dangerous one so to speak, as too many parties are involved, non can do now over 25 or even 30 centum of the electorate in case a snap election is being called. Many wonder if the SYRIZA/ANEL coalition remains in power. Be prepared for every eventuality in Greece. There is as we stated yesterday a struggle to destroy Greece from within and another from outside. Too many allegations fly around the latest involving PM Tsipras with Vladimir Putin saying he was asked to print Drachmas back in the summer of 2015; awaiting both sides reaction to this… CAUTION

The European Union continues to be in a mess.

Chinese finances are not that good and it remains to be seen, what many expect for the Chinese bubble to burst! In the  meantime the  Chinese billionaires list surpasses the respective one in the USA! Greeks have been in China prior to Marco Polo it was revealed yesterday; a very important discovery which, based on DNA findings can have a significance and all together changes in many things; watch this space!

In Thailand King Bhumidol, the world’s longest-reigning monarch – for nearly seventy years, passed away…

Antonio Guterres former PM of Portugal, at 67 becomes the new UN Secretary-General. A colossal work awaits him; Herculian tasks to solve lay ahead…

This week Bob Dylan got the Nobel Prize for Literature and Rod Stewart was knighted by the Duke of Cambridge at Buckingham Palace…

There are more news to come later on in the next update. Until then enjoy the evening and have a nice weekend.

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