The BDI@1,117: uncertainty, volatility, shock and awe… on the way

Dry Bulkcarriers, Insight, Markets, Military, News, Reports, Ship Demolitions, Shipping Indices, Statistics, Stock Markets, Tankers — By on March 27, 2018 at 9:23 PM

John Faraclas

The BDI (Baltic Dry Index) lost nine points earlier on today  and now reads 1,117 points amid an approaching shock and awe in the markets and geopolitics; John Faraclas’ daily recap:

The Capers lost six points with the BCI standing at 1,191 points…

The Panamaxes’ BPI from the 40 plus points yesterday ended today down 23 points!

The Supras’ BSI down with a double digit number: 10 points down and now reads 1,106!!

Hooray hooray for the Handies’ BHSI which was up three points at 648 points!

All in all a very perplexed situation; C A U T I O N as the difference between the end of Dec 2013 (2,247 points) and now, today (1,117) is 1,130 points!!!

The Wets funnily enough were up! The last published BDTI (Dirties) and BCTI (Cleans) stood at 658 and 563 points – up two and six respectively…

The WTI  at US$64.86 shows that it can withstand the reverse shocks…

And now bit of OSV YTD scrapping  rates from the head of Offshore at VesselsValue, Charlie Hockless. :

OSV YTD Scrapping Rates Increase by 153%

In this current period of downturn, critics of offshore shipowners will say that owners have been guilty of not scrapping older tonnage in order to maintain a young and advanced fleet. Though this is justified, rewind to pre-downturn, these debt free older vessels were able to get work on a fairly regular basis, and were a cashflow generator for owners.

The abrupt way in which the offshore party ended in 2014/15 meant that due to their aforementioned earning power, owners have many now idle old OSVs on their books. No one knew the downturn would be so severe, but analysts and market commenters were quick to point to the high number of these older vessels as one of the principle problems with the overall market.

During the first years of the downturn (2015-2016), owners resisted the calls to scrap, no doubt thinking of how these vessels were solid earners in previous years.

However, as the severity of the downturn increased and the likelihood of these older vessels returning to work began to diminish, owners have slowly come round to the importance of scrapping these vessels. So far in 2018, 43 OSV vessels have been sold for scrap. In the first three months of 2017 only 17 vessels were sold. This increase shows owners are biting the bullet and realising that if they are to survive these poor market conditions, they need to think of the future market rather than the market of the past.

Despite the low scrap value of old OSVs, owners are putting faith in the restructuring process and emerging a leaner entity on the other side. A prime example of this being Tidewater, who are unsurprisingly top of the scrapping leaderboard selling 13 vessels for scrap in 2018

The Geopolitics have finally led us to WAR; we are technically at War and it is only a matter when you will see unimaginable things happening in a wider scale. All are premeditated… “For everything around there is always an explanation as well as an excuse; go for the skirt all the way*…” …wasn’t that the causa proxima for the Trojan War? This Greek “maxim” counters Franklin D. Roosevelt’s “In politicsnothing happens by accident. If it happens, you can bet it was planned that way.” Now try to interpret the current situation and in particular how many nations followed the United Kingdom and expelled Russian diplomats – what a powerful greek word: DIPLOMAT…! Sanctions, Embargoes, Tariffs, Cyber Attacks, you name it all lead to the modern warfare…

As geopolitics affect shipping, we urge you to be on guard; it has always been the case but on a very unprecedented and multiple way. The main issue is that of the absence of risk assessment… we look forward in witnessing despicable and unimaginable things to happen.

In the norm of our main news issues flow, all our important matters continue to be here, …not there: The MIGRANTS, the expanding Wars in Syria, Iraq and in the wider Middle East… Turkey’s unsophisticated policy pestering everybody in a 1,000 miles radius around its frontiers; the Greek drama, the coming Balkans inferno…; Italy’s new government, French terrorists behaviour, Germany’s hegemonic role in Europe; Putin’s Russia expansionist modus; BREXIT, the main issue; USA’s sagas… Chinese intrusion in Business… Hundreds of issues…

On another tone and note we remind you of the forthcoming exhibition “Let there be light” by Angelos in London’s Hellenic Centre on 28 April until 8 May 2018; an event not to be missed!

Have a nice evening and be on guard for every eventuality emanating from Pirates and Terrorists wherever you are on Planet Ocean!

___

*free translation of the leading verse of Yiannis Karalis’ song: Ola yia to foustani ola!

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 6 + 13 ?
Please leave these two fields as-is:

Trackbacks

Leave a Trackback