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Tag Archives: Tops

Tanker Freight Rates At Below Operating Expenses Despite Seasonality Factor

Although hardly a surprise, as most market delegates and shipowners were expecting a weak tanker market anyhow, January has proven to be quite the disappointment for tanker owners. Freight rates have fallen at below operating expenses rates, despite the fact that this part of the year should be a positive seasonality factor. In its latest weekly report, shipbroker Gibson said that “for quite some time the consensus in the crude tanker market has been that 2018 will be a disappointing year in terms of industry earnings. However, the extreme weakness ...

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Fast Food Fortunes: How Much For A ‘Big Mac’?

The Economist’s ‘Big Mac’ Index is a well-known comparison of the relative cost of an item (in this case the ubiquitous burger) in different countries, once the local currency has been converted into US dollars, to provide an indication of the cost of living in various places around the world. In shipping, largely, the dollar rules, but investors still need ways of measuring the cost of potential returns… Big Bucks And Big Macs Every week SIW records vessel earnings across a wide range of sectors. However, to understand the ‘cost’ ...

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Baltic Exchange: Capesize rates came under pressure this week

From 1 March 2018 the BDI will be re-weighted to the following ratios of timecharter assessments: 40% capesize, 30% panamax and 30% supramax and will no longer include the handysize timecharter average. For more information see Capesize The north Atlantic market came under pressure with rates sharply lower especially for transatlantic business but this too had a knock-on effect for front haul. Owners’ resistance crumbled in the face of very slow trading. On the BCI C7 route, Jera fixed a 10-19 February 160,000-tonne 10% cargo at US$7.70. As the week ...

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LNG Shipping’s Prospects Positive says GasLog after Rates Were 82% Higher on an Annual Basis

Rates for LNG tankers picked up considerably during the final part of 2017. In the LNG shipping spot market, TFDE headline rates, as reported by Clarksons, rose through the end of the fourth quarter, reaching a peak of $82,000 per day in late December, an increase of 82% from the same time in 2016. According to a market outlook by shipowner GasLog LNG Partners this week, “this improvement in rates, combined with only ten newbuild orders last year, gives us confidence in the sustainability of the current market recovery. While ...

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The Boxship Market In 2017: An Improving Performance

Following the difficulties of 2016, containership market conditions saw some improvements through 2017, and a number of key box sector indicators performed more strongly last year, alongside cautiously optimistic market sentiment. While there remains a long way to go to reach previous highs, comparing the year-on-year change in market metrics illustrates the extent of this improvement. An All Round Performer? Following weakening market fundamentals in the second half of 2015, difficult boxship market conditions were experienced throughout most of 2016. During 2016, however, positive changes to the supply-demand balance did ...

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Global demand prospects are improving, so why is the MPV market yet to see that upturn?

All the economics suggest that the MPV market should be doing much better than it actually is. Demand growth is steady and significantly higher than fleet supply growth, so why are owners still chasing rates? It is all about the competition. Drewry has analysed the correlation between global general cargo growth and GDP growth at about 90%, considering the statistics over the last seven years. This is considered a strong relationship. Yet the significant slowdown in general cargo trade growth over 2017 clearly has other factors at play. The previous ...

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Dry Bulk: Is a More Cyclical Market with Smaller Volatility Back In Play?

Ever since the collapse of Lehman Brothers almost a decade ago and the collapse of world trade which followed, the shipping industry has been plagued with a recurring theme: intense volatility of the freight market, with very steep ups and downs in what seems like a rollercoaster ride, which the industry hasn’t been accustomed to. However, as the downward cycle seems to end, could the freight market be set for a return to normalcy again? In its latest weekly report, shipbroker Intermodal said that “days before the celebrations of the ...

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Dry Bulk FFA: Capesize Index To Face Further Pressure

Highlights: The index has completed 2 impulse waves down, this could be a simple A,B,C correction, however with the stochastic still below 50 we have the potential to see a 3rd impulse wave down. Feb futures are starting to make higher highs, however the 8 period EMA remains below the 21 period EMA and at this point the Feb contract needs to do more to be considered as technically bullish. Both the Q2 18 and Cal 19 futures remain above key MA’s and are making higher highs. However, both contracts ...

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West Africa Poised for Pressure

Suezmax demand outpaced all other sectors in 2017, growing from 2.35 trillion ton-miles to 2.59 trillion ton-miles, about a 9.8% change supported by increased Middle East flows to Europe and long-haul trading from the West (Southern Europe primarily) to the East. However, we observed weakness in the West African Suezmax trades into Europe amid higher crude oil output in the latter and a sizeable shift of Brent-linked West African volumes heading to the East aboard VLCC tankers. Using our remotely-sensed vessel position data, we recorded a 50 voyage increase on ...

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Ships’ Demolition Activity Still Sub Par

2018 has started in relatively “slow mode” when it comes to the ever so crucial demolition activity, across all segments. While things in the dry bulk market are rosier than before, as a result of the freight market rally since the second half of 2017, they could very well turn sour, if scrapping dwindle down. From the opposite scale, the tanker market is looking for more scrapping if it’s to rebound from its low level. In its latest weekly report, shipbroker Clarkson Platou Hellas noted that “a false impression has ...

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Greece owns world’s most valuable fleet at 100 billion USD

Greek owners remain the dominant force in global shipping. The current value of their owned fleet stands at almost exactly $100bn, putting the country at the top of the table. The value is concentrated in the Tanker ($36bn), Bulker ($35.75bn), and LNG ($13.5) vessel types. Hellenic control of these markets stands at about 19% of the total worth of the fleets. The strong commitment of Greek owners to the global shipping markets looks unlikely to change as others, such as Germany, are liquidating assets. The trend in Chinese ownership is ...

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LPG As Marine Fuel: The World LPG Association Supports the Shipping Industry to Meet Emission Regulations

Increasing concern over the impact of human activities on our environment is encouraging the maritime transport industry to move towards the use of alternative fuels on ships as a prime source of energy for propulsion and electricity generation. This trend is being reinforced by national and international regulation, led by the International Maritime Organization (IMO). As a consequence, ship owners will be forced to think about a cleaner fuel and it is inevitable that there will be a radical change in shipping fuel options from HFO to cleaner alternatives. Amongst ...

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New orders still the norm in the dry bulk segment

Ship owners are still looking to modernize their dry bulk fleet in a bid to maximize earnings once the looming up cycle is well underway. In its latest weekly report, shipbroker Allied Shipbroking noted that “things seemed to have been slightly slower on the activity front reported this past week, although the gap seemed to have been present from the lack in activity outside the Dry Bulker and Tanker sectors. On the Dry Bulk side we were still seeing a fair amount of new orders coming to light with a ...

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The World Fleet In 2017: Keeping An Eye On The Trends

The global fleet continued to grow in 2017 even as markets remained challenging, albeit at a slower rate than during most of the last decade. Whilst overall fleet growth reached 3.3% in tonnage terms, up slightly from the previous year, there was significant variation in how quickly shipowners’ fleets expanded across different sectors and countries. Surveying The Sectors After slowing in 2016, fleet growth increased marginally in 2017 to 3.3%, with the global fleet reaching 1,300m GT at the end of the year. This uptick was driven in part by ...

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Slippages from 2017 to prevent recovery of LNG shipping charter rates in 2018

Increasing vessel supply will keep LNG charter rates under pressure in 2018, despite strong growth in trade, according to the latest edition of the LNG Forecaster report published by global shipping consultancy Drewry. Drewry’s short-term outlook for LNG charter rates remains pessimistic because of the high fleet growth rate compared with demand. The fleet is expected to expand by 11% because of high deliveries and low demolition activity. Low freight rates in the first three quarters of 2017 have resulted in a huge pile-up of deliveries in 2018, which will ...

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