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Friday, February 15, 2019

Peter Sand News

Bulk Carrier AdobeStock (Photo: Credit: Lucasz Z WEB)

BIMCO: Trade War Cease-Fire for Dry Bulk Sector

Following an almost total halt in exports of soya beans to China in the last quarter of 2018, the new year has brought new hopes for American farmers and the dry bulk shipping sector. The USDA reported that in the first four weeks of 2019 754,609 tonnes of soya beans were ready to be shipped in China, up from only 25,347 tonnes in December.In addition to the ready shipments, on February 5 and 6, the USDA reported sales totaling 3.2 million tonnes of soya beans to China, the majority of which is to be delivered between now and September 1…

Peter Sand, BIMCO’s Chief Shipping Analyst

BIMCO: US Box Imports Break Records Despite Uncertainty Ahead

Container imports on both the US East Coast (USEC) and West Coast (USWC) had a strong year in 2018, growing 3.7% and 8% respectively in the first 11 months of the year compared to the same period in 2017.Record high levels of inbound laden containers were experienced on both coasts in October with the USWC at 1.09 million TEU and the USEC at 0.91 million TEU according to BIMCO’s own data.The first two months of 2018 saw the USWC coast’s laden imports increase 11.7% from the start of 2017, with the accumulated growth rate then stabilising to around 4% for the rest of the year.

Peter Sand, BIMCO

BIMCO: Global Shipping Scouts for Future Growth

Reflections 2019 – Market Analysis Section By Peter Sand, Chief Shipping Analyst.This article contains extracts from BIMCO’s Reflections 2019, which will be available in full on 2 January 2019 on www.bimco.org and will be sent out to all BIMCO members alongside their free member copy of BIMCO’s Holiday Calendar 2019.Where do we go to find economic growth that spurs shipping demand in the next five years? According to the International Monetary Fund (IMF), we should look towards emerging and developing countries.

File Image: A bulk carrier underway (CREDIT: K Line)

Baltic Index [Finally] Gains on Higher Capesize Demand

The Baltic Exchange's main sea freight index, tracking rates for ships transporting dry bulk commodities, snapped its 12-day losing streak on Thursday, powered by a rise in demand for capesize vessels.The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, gained 11 points or 1.1 percent - after falling 12 sessions in a row - to 1,020 points.The capesize index marked its first gain in 12 days, rising 7.1 percent, or 67 points, to 1,007 points.

© Igor Groshev / Adobe Stock

US Crude Oil Exports to China Stalled

The development that saw no U.S. seaborne exports of crude oil to China in August has continued into September, according to BIMCO. This is despite crude oil not being a part of the ‘official trade war’.“The trade war between the U.S. and China is now impacting trade in both tariffed and some un-tariffed goods with both countries looking elsewhere for alternative buyers and sellers,” said Peter Sand, BIMCO’s Chief Shipping Analyst.“Ton mile demand generated by total U.S. crude oil exports has risen 17 percent from August to September…

File Image: CREDIT CMA CGM

Boxships Buffeted by Competing Calamities

Overcapacity, Fleet Supply, Weakened Earnings, Consolidation – and now – fears of trade wars fuel further uncertainties for an already unsteady boxship climate. MLPro’s Barry Parker digs in to get to the bottom of all of it.The report season for 2018 Q1 corporate results saw an “earnings miss” (reported earnings below consensus forecasts of analysts) for the bellwether of listed container equities, A.P. Moller (APM), with its largest portfolio holding being Maersk Line. In a media telephone interview…

BIMCO's Chief Shipping Analyst Peter Sand

BIMCO: Shipping in the Line of Trade War Crossfire

BIMCO, the world’s largest international shipping association, issued a stern warning today as once again, the already long list of tariffed goods has been made even longer.Many more commodities were hit on 23 August, but September is likely to dwarf it all, as the US has proposed tariffs on goods worth USD 200 billion. According to BIMCO, The tariffed goods’ share of global trade is largely underestimating the overall negative impact of this trade war on globalisation and international shipping.BIMCO’s chief shipping analyst Peter Sand remarked…

© sanguer/Adobe Stock

BIMCO: US soya bean exports to China down 97%

The trade war and particularly the Chinese tariffs on imports of U.S. soya beans can now clearly be seen with the start of the soya bean peak exporting period in the U.S. In the first eight weeks of the 2018/19 marketing year accumulated U.S. exports are down 39%, from 12.2 million tonnes on 26 October 2017 to 7.5 million tonnes on 25 October 2018.“While weekly exports this season have been consistently lower than last season, the week to 18 October marked the single biggest decrease, from 2.5 million tonnes in the corresponding week last year, to just 1.1 million tonnes.

© Evren Kalinbacak / Adobe Stock

Oil Tanker Scrapping to Hit Multi-year High

The shipping industry will this year scrap the largest number of oil tankers in over half-a-decade, driven by weak earnings, firm prices for scrap steel and the need to prepare fleets for strict new environmental regulations.The surge in scrapping underscores how the sector is grappling with one of its worst-ever crises, hit hard after rates for transporting oil plunged to multi-year lows in the wake of excess tanker supply and tepid demand as OPEC production cuts bite."The tanker markets are definitely in a trough at the moment…

© lidian neeleman / Adobe Stock

Baltic Index Hits More Than 3-year High on Strong Capesize Rates

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, rose to its highest in three-and-a-half years on Friday, boosted by strong capesize rates. The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, rose 32 points, or 2.18 percent, to end at 1,502 points, its highest since March 2014. The capesize index was up 199 points, or 6.75 percent, at 3,147 points, its highest level since November 2014.

File Image (CREDIT: AdobeStock / (c) Lucasz Z)

China, Australia Ports Clogged as Coal, Ore Demand Soars

Around 300 ships caught in jam that would stretch 40 miles; freight rates for biggest coal, ore carrier hit 3-yr high. More than 300 large dry cargo ships are having to wait outside Chinese and Australian ports in a maritime traffic jam that spotlights bottlenecks in China's huge and global commodity supply chain as demand peaks this winter. With some vessels waiting to load coal and iron ore outside Australian ports for over a month, key charter rates have jumped to their highest in more than three years.

© sergeevspb / Adobe Stock

Trade Wars Clearly Bad for Global Shipping - BIMCO

On March 1, 2018, President Trump pushed through a metals tariff plan that puts 25 percent tariff on imports of steel and a 10 percent tariff on imports of aluminium. They are set to enter into force on March 23, 2018. The Trump administration seems positive towards protectionism and that picture became clear when the pro-trade U.S. President Donald Trump’s chief economic adviser Gary Cohn resigned on March 6 because of the tariffs imposed on steel and aluminium. Although the tariffs on steel and aluminium are expected to have a limited impact on most international bulk trades…

Dry Bulk Fleet Growth (Photo: BIMCO)

BIMCO’s Market Analysis Team Launch Supply Side Graph Section

BIMCO’s Market Analysis Team launches a graph section, where BIMCO members can get an overview of a specific sector and how the supply side of that sector develops. “We have structured the data and made it easily available through our website. In this way our members will follow the most recent developments affecting their core interest. This gives them an unbiased and transparent tool for their decision-making process. The goal is to ease the way to rational strategic business decisions,” says BIMCO’s Chief Shipping Analyst Peter Sand.

Graph showing Chinese Imports of Soya Beans

BIMCO: Trade War may change Soya Bean Trade Lanes

Soya bean trade lanes may change due to the ongoing trade war. The shipping of soya beans from the US to China is one of the most significant ‘one commodity’ cargoes that may become affected by the trade war between the US and China. Soya bean trade lanes will be affected if the Chinese buyers shy away their traditional suppliers because of the extra cost from the proposed tariff on US soya beans. A move that may favour Brazilian ones further, which also hold a higher protein content.

© vladsv / Adobe Stock

Trade War All About the Eastbound Transpacific -BIMCO

When two of the world’s top trading partners get entangled in a stand-off, where the outbreak of a trade war could become the extended tool of intense negotiations, BIMCO says we’d better prepare for what may come while hoping that it will never take place.The U.S. is China’s largest trading partner measured by value – and China is the largest one-country trading partner that the U.S. has.“The global shipping industry naturally gets concerned when two nations of huge importance to most shipping sectors get in the ring to fight a trade war – gloves off…

© Faraways / Adobe Stock

Dry Bulk Fleet Grows as Supply Surges -BIMCO

As the dry bulk fleet grew by 2.6 percent year on year in January 2017 it exceeded 800 million DWT. This was due to dry bulk demolition being half of what is was in January 2016, while total dry bulk deliveries reached its highest level since January 2013. In February 2017, fleet growth reached 2.8 percent. If the fleet growth remains above 2 percent, the dry bulk shipping industry cannot rely on global demand to cure the oversupply caused by this fundamental imbalance in the market.

© Dmitry V. Petrenko / Adobe Stock photo

Economic Indicators Pointing Up -BIMCO

The recent months’ uptick in global indicators, which implies a strengthening in the global economy, is not sufficient for the patient to be discharged yet. The state of the global economy is still uncertain, despite stronger growth dynamics in advanced economies, and not least in China. When the IMF updated its outlook for advanced economies for 2017 and 2018 in January, it was the first time since 2007 that an IMF January update lifted expectations for the present and coming years.

File photo: Hapag-Lloyd

Container Shipping: New Networks in Focus

The most recent available data show that demand for the container shipping grew by 2.7 percent in 2016. With the supply side growing by only 1.3 percent, this meant that the fundamental market balance improved for the first time since 2011. This development is primarily due to decisive actions by ship owners who sold excess tonnage for demolition. Hopefully, improved earnings will also follow soon. The metric-ton-mile demand side has grown by an average of 3.4 percent annually during 2012-2016. This is a new and lower growth level that has taken some time for the industry to get used to.

(Image: BIMCO, Clarksons)

‘Vintage’ Converted VLOCs Still Profitable -BIMCO

With an average age of 23.8 years, the fleet of very large ore carriers (VLOC) converted from very large crude carriers (VLCC) is vintage compared to the average age of 5.7 years for non-converted ore carriers above 200,000 DWT, according to BIMCO. But despite the huge 18.1 years age gap between converted VLOCs and normal VLOCs, the age itself is not the all-important explanatory factor behind a demolition decision. Naturally safety is a paramount issue, but also the fact that the vessels are still employed on a contract.

© Nightman1965 / Adobe Stock

Dry Bulk, Tanker Newbuilds on the Rise -BIMCO

Tanker and dry bulk vessel newbuild contracts have been signed at an increasing pace so far in 2017, with newbuild activity for the first half of 2017 surpassing the same period last year by 20 percent. According to BIMCO, 5.9 million DWT was contracted in May 2017 and 3.1 million DWT so far in June 2017, which brings the total amount of newbuild orders up to 19.6 million DWT for 2017. So far for June 2017, 22 tankers have been contracted amounting to a total of 2.6 million DWT. For the crude oil tanker segment, this has been entirely for suezmax ships with 1.9 million DWT ordered.

© Valentin Kundeus / Adobe Stock

Baltic Index Hits near 3-year High

The Baltic Exchange's main sea freight index, tracking rates for ships carrying dry bulk commodities, touched a near three-year high on Monday, supported by higher rates across all vessel segments. The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, gained 23 points, or 1.73 percent, at 1,355 points - the highest since Nov. 2014. "The market has been solely driven forward by the capesize shipping segment this year. Only recently have we seen panamax and handysize climb to profitable freight rates…

(Source: BIMCO)

BIMCO: Containership Scrapping Heats Up

demolition of containerships almost tripled in the first five months of 2016 in comparison to the same period of 2015. This illustrates the efforts carried out by shipowners to counter the fundamental imbalance between supply and demand under poor container shipping market conditions. However, more needs to be done to lift the charter market. The demolition of capacity in the panamax segment (3-5,999 TEUs), since the start of January 2016 till the year to date, has been especially significant.

(Photo: Robert Kunkel)

Newbuild Contracts at Lowest Level in 20 Years -BIMCO

Shipyards have become the next victim of the deteriorating conditions in the dry bulk, container and offshore markets as 2016 looks to set the record for the lowest newbuilding contracts in more than 20 years, according to international shipping association Baltic and International Maritime Council (BIMCO). After a decline from 2010 to 2012, shipbuilding had a rebound in 2013 and was expected to level out over the next few years. The reality was a slight decline in 2014 and 2015, but still high levels of contracting measured by compensated gross tonnage (CGT).

Image: BIMCO

Plunging UK Coal Imports Starts ‘Concerning Trend’ -BIMCO

The main exporters of thermal coal for coal-fired power plants to the U.K. have experienced a heavy decline in seaborne cargo volumes in 2016. This comes as a result of the U.K. starting a concerning trend for the dry bulk shipping industry, by close to doubling its Carbon Price Floor (CPF), says the Baltic and International Maritime Council (BIMCO). Russia, Colombia and the U.S. have been the top coal exporters to the U.K. for the previous three years. The long hauls from the U.S.

Source: BIMCO, Clarksons

Ship Breaking Activity Grows Slowly but Steadily -BIMCO

Global ship demolition activity rose by 16 percent in the first nine months of 2016 in comparison to the same period of 2015, showcasing shipping industry action to counter the imbalance between supply and demand in the market, according to BIMCO. However, diminishing demolition activity from March through July was bad for the recovery of the market. But could the recent increase in August and September be seen as a mild sign of hope? From a broader perspective, a total of 36.2 million DWT was demolished in the first nine months of 2016…

Source: BIMCO, EIA

Big Slowdown for US Coal Exports -BIMCO

Since Q1 2013, the significance of U.S. coal exports has seen a considerable setback, with 2016 achieving the same levels as 2009. This is due to the long-haul routes carrying coking coal from the U.S. East Coast and U.S. Gulf Coast to East Asia, are not operating to the same extent and the EU is demanding less thermal coal, says shipping organization Baltic and International Maritime Council (BIMCO). When BIMCO first published its story concerning U.S. coal in 2013, U.S. coal exports had the most significant coal trade in the world, measured by metric-ton-miles.