BIMCO: VLCC Freight Rates from Gulf to China Doubles
VLCC spot freight rates between the Arabian Gulf and China rose 101% in the days between June 13, 2019 and June 20, 2019, in the aftermath of attacks on two tankers in the Strait of Hormuz. Spot freight rates for a VLCC, carrying 2 million barrels of oil, between the Arabian Gulf and China reached USD 25,994 per day on June 20, their highest level since March and significantly above the May average of USD 9,979 per day.Despite this increase, freight rates on this route only narrowly exceeds the daily break-even costs of a VLCC…
BIMCO: "Continued Pressure" for Bulkers
Demolition of dry bulk ships in the first four months of 2019 was 120% higher than in the same period of 2018. Much of this increase comes from demolitions of Capesize ships, up from 1.1m DWT between January and April 2018 to reach 3.4m DWT in the first four months of 2019.Despite the increasing in scrapping, the bulk carrier market, particularly on the large ship side, will remain under pressure for a number of reasons, starting with stagnant demand, from the short term shock and impact of the dam collapse in Brazil and bad weather in Australia…
Brazilian Soya Bean Exports Soar
According to a research note from BIMCO, Brazilian soya bean exports are up 85.2% in the first two months of 2019, this following a record high exports in 2018 of 83.6 million tonnes, which was a 22.7% increase from 2017.According to BIMCO, 2019 has seen the highest ever export of soya bean during the month of February. Exports totaled 6.1 million tonnes, a 112.6% increase from the 2.9 million tonnes exported in February 2018. Strong demand, in particular from China, the world’s largest soya bean importer…
“It’s the steel production, stupid!”
BIMCO's Peter Sand, in a new report, weighs in on the implications for the Dry Bulk sectors.Chinese imports of iron ore keep falling, while its crude steel production keeps growing. China’s increased use of scrap metal for its production of crude steel is fundamentally critical to the dry bulk shipping industry. Mostly Capesize ships are impacted by this, way beyond the temporary iron ore export disruptions in Brazil and Australia.Chinese steel production grew by a massive 12.6 million tonnes (+9.2%) in the first two months on 2019 as estimated by China Iron and Steel Association (CISA).
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…
BIMCO: US Seaborne Crude Oil Exports Hit Record High
US exports of crude oil have, since August 2018, continued to rise every month, with a new record high in January of 9.6 million tonnes. Exports rose in January on the back of increased sales to Europe, which rose from 2.7 million tonnes in December to 4.8 million tonnes in January.A strong end to 2018 meant that volumes for the full year totalled 87.4 million tonnes, 96.7% higher than the 44.4 million tonnes exported in 2017. This is good news for the crude oil tanker sector…
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.
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.
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: 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…
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…
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.
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…
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.
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.
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.
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.
‘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.
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.
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…
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.
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.
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…
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.
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.
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…