Fearnleys Shows Slight Market Recovery

Vogemann has declared their option for another 4 Newcastlemax vessels from JES. Price reported to 53 mill USD, which is about 4 mill USD below current price level at Chinese yards.
Both CMTC and Costamare have declared optional Container vessels at respectively DSME and Hanjin Subic Bay, while Navigator has exercised option to build another 3 LPG carriers at Jiangnan shipyard.
Average Far Eastern Prices
 
DRY BULK
CHARTERING Handy
There is still no place to hide in the Atlantic for the smaller but flexible sizes. Slow and weak seems to be the headlines, although the Pacific is slowly showing some signs of recovery. USG to Brazil is done at arrnd mid 5K, trip across to Med at high 8’s. Fronthaul in the mid 15.000 rge. A flow of fresh requirements lifting the Pacific slowly to 10-11 K bss Spore for coal rounds.
Owners see mid 9’s China-Indo-India runs, and abt same for NOPAC or 10-11 + 300 BB APS. South Africa have not changed much, where India positions get abt 12 K + 250 GBB for trips via S Africa to the East. Period not very active, although larger Ultramax apparently done 13.500 for Sh period bss del CJK.
CHARTERING Panamax
The Easter break did not cause any radical changes to even the most strong believers. The overwhelming oversupply of tonnage versus too few requirements and low activity still prevails in both hemispheres. Owners in the Atlantic are simply holding back from fixing the poor returns offered.
However, with a slow flow of fresh requirements sentiment is pushing the Atlantic slightly up to 3-5.000 on T/C, but far less on voyage terms. The long lack of push from ECSA grains could be in a turning point, although it remains to be seen a clear postive trend. Typical levels mid week at abt 14.500 + 450 K GBB APS. In the Far East, where most people live, it is quiet and levels are still poor. Levels hovering in the 7.000 range for various rounds up to abt 9.000 for NOPAC on T/C. There is a scent of optimism from ECSA grains expectations and tick higher levels are seen on Indo/india runs. Lifting of the 19 month old iron ore ban in GOA could have a positive effect for the Panamax owners after the monsoon season later this year.
Meanwhile, the period market is in a waiting mode, under the motto: “let’s see tomorrow” lacking suport from a flat forward curve.
CHARTERING Capesize
After Easter, the sentiment has turned more positive and owners will rather let their ships wait or ballast than fix pre Easter levels. West Australia / Qd is presently at USD 7,60, and more owners are aiming in the 8s. Its more coal being shipped and rates are slowly improving for trades like Indonesia /India and east coast Australia/ Far East. For the Atlantic and front haul however, it remains weak with lack of requirements. Its however expected this will change within soon, which will together with increased period interest be the main contributors for improved rates.
RATES
 
TANKERS
CHARTERING Crude
The VLCC activity picked up somewhat as most players in the West returned from their Easter holidays. Some fresh requirements appeared the last couple of days, and charterers continued to secure coverage off the market. Rates remain stable/soft pending on voyage, age and charterer etc.
Its expected take a few days before the market is up and going again after the long break, but for the time being charterers seem to be in the driving seat. The Atlantic remains quiet with limited action to report and rates are stable at similar levels seen prior to Easter. Due to a Short Easter week, the fixing volumes in West Africa got somewhat compressed and in combination with some prompt replacements, rates went up and peaked at ws 75 for a voyage to Europe.
Everybody is now back from the Easter Holiday and the market has already dropped significantly as the tonnage overhang for first decade is ample and Charterers are already starting to cover for second decade. The Easter boost is also over for Suezmax tonnage in the MED and Black sea and rates have eased off accordingly. The Nsea and Baltic aframax markets remain pretty much unchanged from last week. But at time of writing, just after the holidays the market is showing some small signs of a change in momentum and weakening rates.
After the Easter break the position list in the Med/Bsea opened up a little and charterers who were still looking to cover cargoes with April dates managed to push rates down a couple points. Going forward Fearnleys expects the market to soften a bit more as more available tonnage emerging for May loading dates. A couple of vessels being cancelled ex Ceyhan due to non production on the Botas pipeline will also reinforce the downward pressure on rates. The Caribs market has continued its downward trend in the beginning of this week, mainly due to more available tonnage and no delays, and it is now stabilizing around ws95.
CHARTERING Product
As the Easter holiday has come to an end, the LR2 market in the East has continued its soft trend from last week. Plenty of available tonnage are moving into the AG, and too few longhaul cargoes around have steered the market to ws 87,5 for MEG/Japan down another 2,5 points from last week.
The LR1’s are basically in the same situation as a week ago around ws 90 for MEG/Japan. Westbound voyages from the AG on both LR1 and LR2 have also softened a touch over the holidays, and currently Fearnleys assess a MEG/UKC voyage at USD 2200k and USD 1675k respectively for LR1 and LR2.
The MR market have followed suit with a steady to soft trend the last week and currently Fearnleys sees ws 115 for SPORE/Japan. Just like the East, the West has also been pulled down by the Easter holiday and the market is currently suffering. MR’s going TA are currently being fixed at ws100 and sadly there is not enough activity at the moment to get the hopes up for the immediate future at least. Ships going CONT/WAF are also being punished, and currently Fearnleys is assessing the market to be at ws115.
LR1’s have not seen such a dramatic drop but are today at ws 90/95 level. Backhaul cargoes ex USG was fixing at ws 80 basis 38kt before the holidays, but have plummeted 12,5 points down to ws 67,5 today. LR1’s doing backhaul cargoes are more or less unchanged from pre-holidays levels at around ws 65. Handies trading cross UKC are only marginally down to ws 185.
RATES
 
GAS
CHARTERING
The VLGC market is still extremely firm and the Baltic VLGC index has continued its trend of record postings every day. That being said, with the Easter break in-between, not many postings have been done. The activity level is also reflected by the Easter break obviously, and the market still awaits a return to normality.
However the situation on when ships are available is still unchanged with owners still uncertain on when/where their ships may come open, thus “normality” may be somewhat further down the line. One fixture has been concluded in the West, at a level just above the Baltic VLGC index equivalent. Thus the West Premium may be gone for now, but with a very limited availability of ship in the West, the premium might very well return on the next fixture. In the East Fearnleys has noted some inquiries from India, where one ship has been secured on subjects at record levels, but at a premium to the Baltic index reflecting previous fixtures.
RATES
LNG
 

fearnresearch, April 25, 2014