The BDI gets stuck into snow… and geopolitics in the cupboard

Chartering, Dry Bulkcarriers, Markets, Reports, Sales and Purchases, Ship Demolitions, Shipping Indices, Tankers, Weather — By on February 28, 2018 at 8:10 PM

John Faraclas

The BDI (Baltic Dry Index) gained four points thanks to the  Supras and Handies; at 1,192 points same remains stuck …in the snow… Geopolitics’ cupboard is full of skeletons; CAUTION. John Faraclas daily recap:

The Capers’ BCI was down 35 points and now stands at 1,560…

The Panamaxes remained stuck at 1,513 – …zero points like the max temperature in London today…

The Supras and the Handies both produced double plus figures; 973 and 557 which is plus 25 and 12 respectively for the BSI and BHSI which will be eliminated as of tomorrow…

Still the BDI is 1,000 plus points below the end of Dec 2013 closing – that of 2,247; 1,055 points down. Now it’s silly to say that the market recovered from the 290 points low on the 10th of Feb 2016 and find all sort of excuses.

The Wets on a minor plus mode; the last published BDTI and BCTI stood at 658 and 621 – six and three points up respectively… Still the market needs to see at least the 1,000 point level for both Dirties and Cleans; end of the story!

From VesselsValue we have an interesting reporting on Tankers demo:

3.5m DWT Tankers Scrapped in 2018 so far

Tanker scrapping slowed in 2015 due to three key factors: Stronger spot market returns, low price being offered by buyers at the recycling yards, and the demand to store oil following the price collapse in late 2014. Each played a part as the decision to remove a ship from service varies depending on the financial situation of the owner. Some may be motivated as the $/t offered price offsets enough of their remaining mortgage on a ship to allow them to move out of a low cashflow market, while others may remove a ship after it completes a long-term storage contract.

..

Higher spot market returns were due to higher levels of removals over the past several years combined with a low level of orders. This led to a contraction in fleet sizes in many segments.

Restrictions on emissions in China as the country grapples with air pollution issues has led to a rise in steel prices. The impact of this is seen in the global steel markets, which influences the value recyclers are willing to pay per lightweight ton. The price being offered in India for tankers and bulkers has been trending upwards since mid-2016.

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The sudden drop in oil prices led to a demand for floating storage as shoreside tanks filled due to contango in the oil markets. Older ships were taken on three to 12-month charters to store oil as they were able to offer lower $/day numbers than prime (less than 10 years) aged ships. The employment of these ships removed them as scrap candidates and kept them on the water.

High scrapping and market consolidation will contribute to better returns for owners over the next several years. For the harmony of the global shipping markets continues, older units are removed in a weak market and replaced with new vessels as rates recover.

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The WTI as these lines are being written stands at US$ 62.43 – on a slightly falling mode; let’s see a more than five dollars fall… to alleviate the financial burden of the poor masses…

The Markets are in hibernation and wonder when the Chinese Dog will bark – the Chinese new year is over and wonder where ae the accounts…

The sale of HSH-Nordbank was the major news of the day; let’s see how the new owners turn this entity around. At US$ 1.2 billion sounds an exceptional low and favourable price for the buyers; watch this space!

In Geopolitics we have too many skeletons in the cupboards, too many!

…the beginning of a white day in the City…

Severe weather conditions in the British Isles with red alert in some places; looks likely conditions will remain until Friday. Many business and social business events have been cancelled. Travel disruption at …its best; Caution!

More News before midnight.

Have a nice evening and be on guard from any eventuality emanating from Pirates and Terrorists wherever you are on Planet Ocean.

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