The BDI@1,195: what next…

Chartering, Containers, Dry Bulkcarriers, Markets, Mergers and Acquisitions, Military, News, Oil Industry, Reports, Shipping Indices, Statistics, Stock Markets, Tankers, Trade and Commerce — By on April 21, 2017 at 8:44 PM

John Faraclas

Time and again we have warned that the markets – both dry and wets, are more than volatile and uncertain and numerous times we have expressed concerns, due to the volatility and uncertainty, on the issue of valuations. How can we get it right and avoid this time the second biggest coming shipping catastrophe?  The Geopolitics too are more than dodgy and one needs good feed-back and projected forward analysts and knowledge to rely on… John Faraclas’ …eight days*… a week market report:

With the BDI (Baltic Dry Index) down 48 points since yesterday to 1,195 points and 101 since Thursday the 13th of April (pre-Easter), when it stood at 1,296 points, things might get for the majority of the shipowners – trump or liner, sour… wonder all this euphoria from many sides of the …equilibrium if it remains or evaporates…. “Wonder” though how many will survive as our main projected belief is that shipping and conversely shipowning will be retained only by the very, very, very few! Add the cataclysmic geopolitical developments which will soon be a reality and see how one can survive! The modern world of shipping, that is to say between 1890 – 2008, has survived two world wars, numerous depressions and recessions, seven major crisis, still continues to thrive in an era of globalisation, technical revolutions and rapid digitalisation and it needs the wisdom of a century old man and the eagerness as well as the curiosity of a one year old… to successfully continue in this new era. Just take the fact of president Trump’s shaking up of NAFTA and the competing sagas taking place in Europe by China and Putin’s Russia as well as in the Feast and see what is yet to come… How we can secure transport through the dire straits, particularly now with events escalating in Aden, or in Bosphorus and the Dardanelles, Gibraltar, or Hormuz and Malacca, or Otranto, even at Suez yet again and later on in Kiel, Panama… when terrorists are free around and we haven’t as yet reduce them to rubbles; add the forthcoming conflicts and see what is yet to come – shipping, the most important and most promising of all means of transport will be reduced to shipping for the very very very few as we mentioned numerous times before as well as above in para two… Did I hear you say National Fleets…? Eh???

The Capers lead the fall both on a daily as well as on a weekly basis with a triple points minus – 161 since yesterday at 1,830 and 419 since last Thursday’s 2,249 points! Caution is the least to say…

The Panamaxes followed and the fall was 59 down at 1,494 today and minus 117 points since last week’s 1,611.

The Supras’ BSI lost a point since yesterday – now reading 895, and minus four since last week’s 899 points.

The Handies’ BHSI was the only category with a plus daily rise – plus three at 575 and plus 15 since last week’s 560 points; you don’t have to be big to be beautiful…

Despite this falling dry market, some houses managed to get some good deals and why not given their ability to find money or some, very few, had saved… enabling them to proceed. We insist that this is the best ever buyers’ market, particularly for those with funds in hand, or being trusted by those who possess same to lend same to them and secure a well projected future investment.

Remind you that the …health level for the Dry Market is when the BDI will return to the 2,200 points per December 2013 level! If this doesn’t happen, expect more mess and bankruptcies… This is our position and we adhere to insist on this as we have dozen of times expressed same. Results speak for themselves, same applies from the wrong position of the majority of analysts. Analysts and shipbrokers should NOT play around with the shipowners’ fortunes and luck!

There have been some interesting transactions, worth the effort and money spend which might prove fortunate and decisive. There have also been some bankruptcies due to the wrong assessments although those losing their tonnage were traditional and healthy shipowners.

The Wets still very questionable despite the day’s and week’s results; the last published BDTI (Dirties) and BCTI (Cleans) stood – on a daily basis, at 819 points (the same since yesterday) and 660 – plus 17 respectively. On a weekly though both were up 29 (from 790) and 21 (from 639) since last week respectively. Again we need another 1,000 points on top of these figures and see both Wet Indices back to the 2,000 levels.

Let us see then who are the …Riders on the Storm… The Storm is coming and we have hinted that Shakespeare’s Tempest was a mild event… Imagine what is yet to come. With this, we are sending out a warning, despite that we will also going to witness a good time, but same will be minimal in its duration and results… This is a real hint that there will be an upside but few will be able to capitulate…

The WTI fell, thank God for that, below the US$ 50 point-mark (from its latest US$50,71, despite going up at US$ 50,91) and now reads US$ 49,73 – it even fell down to US$ 49.20…

On the Geopolitical front we had a very interesting and “equally” dangerous eight days and many more – unfortunately, to come. Planet Ocean enters one of its history’s and existence most important eras, the era of global mess in all fronts, despite the uncertainty and destruction it entails…the situ will be become murky!

The MIGRANTS issue still on top; add the death of hundreds of them and the thousand or so from the beginning of the year trying to move from Africa’s north coast to Europe and from Turkey’s Anatolian coast to the Greek islands, then to the Greek mainland for the onwards “trip” to Europe… with whatever this entails so far… and see what you get. Add also the danger that many ISIS and Taliban fighters have entered Germany as MIGRANTS – and other nations too, and see what might be soon the outcome!

The Syrian Wars as well as those in northern Iraq continue. We must all be prepared for the post ISIS defeat and where the …”gravity” of the situation will be “transferred”… The Syrian saga itself is a very shameful part against humanity…

The Turkish Referendum delivers a shocking outcome; Turkey is divided badly and watch-out the repercussions of Erdogan’s Pyrrhic victory. Turkey is getting involved too much in the region as a pretext to secure its “vested” interests but at the same time denying treaties with all its neighbours which can cause havoc even to its backers…

Next door Greece, with its internal and external pressures, a situation which might explode with incalculable repercussions for all – even the current coalition regime’s backers, gets the pressure from Turkey in the Aegean and beyond and the shit will hit the fan soon… The continued violation of Greece’s airspace and waters can backfire beyond to both countries frontiers and region. The instability in the Balkans too is another factor of concern. CAUTION of what may take in the Western Balkans and see the Straits of Otranto on fire..!

BREXIT, this major event following last year’s Referendum as well as the forthcoming elections on the 8th of June will dominate the world news.

The French presidential elections – first round, in less than 36 hours are a cause of concern for all given the Marine Le Pen phenomenon as well as the turmoil in France, not just in Paris with respect the Terrorists attack and the latest one against police officers. Things are shifting dangerously in France and we have witnessed ourselves the extreme security measures in force late last month during our passing through and reporting on all issues there…

In Germany too there are going to be many changes and let’s see the end result of Mrs. Merkel continuous involvement in politics… Financially, despite what one can observe, Germany is in trouble… Wonder why Mr. Wolfgang Schäuble cannot get Germany’s act together… why he try’s to safe France… and continues to press Greece and others… Mr. Schäuble must look for Germany’s skeleton in his and Mrs. Merkel’s cupboards, as a first step to save Europe…

Italy has been degraded to BBB from BBB+ by Fitch, two notches above the speculative grade… Having just visiting Italy, ALLABOUTSHIPPING’s second country last month for our European analysis, indeed there are problems which have to be tackled asap. The good thing is that Italy has heavily invested in the infrastructure, particularly high ways for the safe and fast moving of logistics as well as to other aspects – better than France! Caution there too…

Reading the above on Italy and France as well as for Germany and Greece not to mention what happens all over the Mighty Continent, one wonders what went wrong so far in Europe and particularly in the European Union and the Euro zone… Pity…

In the other side of the Atlantic things are still developing in all fronts and the Super power is flexing its muscles.

The US is after Julian Assange of Wikileaks and it is about time they bring him to justice. A very complicated issue and a bit of a messy one once he has been “vomiting” too many things around… Let’s see what the US Attorney General can do!

In South America, the Venezuela events might ignite trouble in the region. It seems that Tsaves’ heir, Nicholas Maduro is making a big mess with incalculable costs – both of life as well as financial to an otherwise blessed country – full of oil and many more natural recourses. Wonder how he has so many strong bonds and why with many countries, otherwise there is something more than sinister… CAUTION!

All in all the entire South American continent is marred with poverty and too many financial irregularities, scandals which can lead to tensions putting the entire SAC on fire. A social upturn in many countries there could be a possibility and cannot be ruled out… Argentina, Brazil have already produced too many scandals… CAUTION!

In  the Far East the MH370 saga continues with a bit of more scientific evidence following some findings. We eagerly await to learn one day what REALLY has happened. Nothing can be hidden in 2017 under the sun…

Events not to be missed:

  • Seminar on US Regulatory, Financial, and Political Issues Affecting Shipping
    The Marshall Islands Registry & Blank Rome LLP United States (US) Regulatory, Financial, and Political Issues Affecting Shipping on Wednesday, 26 April 2017 at Metropolitan Hotel, Athens
  • Marine Money Cyprus Forum taking place on 26 April 2017 at the Four Seasons Hotel, Limassol
  • Worth attending the Singapore Shipping Forum 2017:  The future of shipping: Game Changers! A big day for all in the FarEast being the 27th of April !
  • Then the 7th Ann. Houston Offshore Finance Forum – May 3rd (Wed. of OTC)
  • Join also later on the Capital Link International Shipping Summit – China on Friday, May 5, 2017 in Shanghai…
  • Another great event / anniversary: The 30th Annual Marine Money Week between June 19-21 at New York’s Hotel Pierre…

Wish you a nice weekend and in the meantime, be on guard for every eventuality particularly Pirates and Terrorists.

*From the Beatles song: Eight Days a week…

 

 

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