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Monday, July 6, 2020

Peter Sand News

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Will Container Shipping Woes of the 2010s Repeat?

Reduced volumes are currently posing a major challenge to container shipping due to the COVID-19 crisis. So far, freight rates have been held up by the massive blanking of sailings that carriers have put in place.However, even before this crisis, the container shipping industry was saddled with overcapacity carried over from the previous decade, a problem that will rise again due to the demand fallout from the COVID-19 pandemic.To understand the challenges that the container shipping market will face in the coming years…

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Geopolitics Dominate the Oil Tanker Market -BIMCO

Developments in the oil tanker market in the past decade dominated by geopolitics, says shipping association BIMCO.Crude oil and product tanker markets alike have faced high volatility in recent weeks and months, largely due to geopolitics and the constantly evolving situation in the global oil markets. The first major disturbance since the fall in the oil price between the fourth quarter of 2104 and first quarter of 2016 came in the fourth quarter of 2019, after which freight rates have bounced back despite a collapse in demand.In these extraordinary times…

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Baltic Index Logs Record Jump as Capesize Demand Spikes

The Baltic Exchange's main sea freight index recorded its biggest ever daily percentage jump on Wednesday, propelled by surging capesize rates due to a spike in iron-ore shipments.The Baltic dry index, which tracks rates for ships ferrying dry bulk commodities and reflects rates for capesize, panamax and supramax vessels, rose 192 points, or about 18.2%, to 1,246, its highest since Dec. 17.The Baltic capesize index jumped 601 points, or about 32.4% to 2,455, its highest since Dec.

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Suez Canal Ship Transits Rise Amid COVID-19

Transits through the Suez Canal, the beating heart of the Egyptian economy, have stayed remarkably resilient to the fallout of the COVID-19 pandemic if judging by total transits of the three commercial shipping sectors which are up 8% year-on-year. This is despite bleak economic growth prospects world-wide following the pandemic, and highlights that shipping remains the backbone of the global economy.It is often said that a picture says more than 1,000 words, but 6,166 ship transits in the Suez Canal can certainly also tell an interesting tale.

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Container Shipping Hit Hard by US Lockdown -BIMCO

The coronavirus pandemic has shutdown much of the U.S. economy for months and even as parts of it reopen, the data is beginning to reveal the extent of the damage that has been done and a slow recovery is taking a tentative shape.The second estimate for gross domestic product (GDP) in the first quarter shows a 5% contraction from the previous quarter, and just 0.2% growth from the first quarter of 2019. With lockdown measures having only come into force in late March, the second quarter of the year will prove even more damaging for the U.S.

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China to Europe Container Spot Rates in Rare Reversal -BIMCO

Throughout April, container shipping spot freight rates on the back-haul trade from North Europe to China were higher than those on the front-haul trade from China to North Europe. This is a rare occurrence that has developed in the wake of the massive supply chain disruptions in the world’s top manufacturing hub due to the COVID-19 outbreak, causing aftershocks across the Far East.“A reversal of front-haul and back-haul spot freight rates is a rare event. Especially on a high-volume main trade route like the Far East to Europe…

Source: BIMCO

BIMCO: 2020 and the Collapse of Bunker Fuel Markets

The sulfur regulation from the International Maritime Organization (IMO) that came into force on 1 January 2020 took the center stage in the shipping industry at outset of the new decade. Four months on, the spotlights have turned to the coronavirus and the OPEC+ oil price war.The outlook for global economic growth remains bleak as the world is faced with the largest recession since the Great Depression in the 1930s.Commodity prices have declined across the board and most recently…

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Three of Five Converted VLOCs Are No Longer Operating -BIMCO

Converted very large ore carriers (VLOC) are increasingly becoming a thing of the past with the long-term freight contracts coming to an end as newer and more reliable ships replace them in the market. Since June 2017, 43% of the VLOC fleet have been sent to the scrapyards, while 18% of the fleet is idled or damaged.“The tragic Stellar Daisy accident brought the safety aspect of VLOCs into question. Now, three years on, three out of five VLOCs are no longer in operation as their long-term charters have now expired.

Overcapacity and low demand growth set the tone in the 2010s -BIMCO

Over the past decade, the developing world economy has allowed for strong growth in shipping activities, with the demand for transport never having been higher. However, the benefits of this growth have been limited due to the industry jeopardizing the good times by ordering too many ships.In the 2010s, the supple of ships has largely outgrown demand, putting freight rates under pressure persistently and causing challenging conditions for the dry bulk market. A total of 413 million DWT has flooded the marked since the turn of the decade…

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Coronavirus Disrupts Supply of Ships and Demand -BIMCO

The coronavirus outbreak has affected all aspects of the shipping industry, lowering, if not wiping out, demand growth prospects for the year across all segments. The outbreak has also affected fleet development, says shipping association BIMCO.Contracting activity has fallen, demolition activity, which had been high, is now being limited by restrictions around the world and deliveries of new vessels are delayed.“The coronavirus has certainty replaced the IMO 2020 sulphur regulation as the talking point of the year.

Source: BIMCO, Clarksons

While Oil Prices Plummets, Tanker Rates Fly High

If one ever needed proof that, no matter how dire the situation, there is always a silver lining, look no further than the crude tanker market, which has seen it day rates skyrocket in the face of a global pandemic that has effectively ground world commerce to a crawl.As is the case with other gravity defying business phenomena, geopolitics is a central factor, in this case a battle between Russia and Saudi Arabia to flood the world with oil in the face of declining demand and…

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Shipping Not Immune to a Pandemic -BIMCO

The World Health Organization (WHO) has declared the outbreak of the novel coronavirus a pandemic. There is little doubt that this will have significant implications for the shipping industry. But to what extent? BIMCO expects that the strict containment measures imposed by governments around the world will result in substantially lower global economic growth and consequentially, lower demand for shipping. Container and dry bulk shipping are at the front line when it comes to feeling the fallout…

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BIMCO Revises 2020 Forecast

The coronavirus pandemic is impacting global shipping demand for 2020 negatively. The speed of the virus spread makes it difficult to assess the full consequences. Nevertheless, we see a need to update our 2020 forecast to make some of this massive uncertainty tangible.What is going on in addition to the coronavirus pandemic?Geopolitical tensions that made the OPEC+ alliance break down, has subsequently made the crude oil tanker spot freight market erupt. The events that followed the breakdown - and those that are likely to follow…

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BIMCO: US-China “Phase One” Fails to Boost Trade Volumes

Even before the effects of the coronavirus, the ‘Phase One’ agreement between China and the US failed to boost volumes of the implicated goods in January. In fact, exports of the manufactured, agricultural and energy goods included in the deal were down 26% from January 2017, which serves as the base year for the agreement.The ‘Phase One’ agreement which was signed on 15 January 2020 to lowered some US tariffs on imports from China, which in return has committed to increase its imports from the US.

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Capesize Index Turns Negative for the First Time Ever

Capesize index plummets to -133, the first time ever in negative territory – is it all up from here?The Baltic Exchange Capesize Index (BCI) dropped to -133 index points on February 4, 2020, turning negative for the first time ever on January 31, 2020. The composite BDI index (BDI), which has excluded the more stable handysize segment since March 2018, also dropped on February 4, 2020 to settle at 453 index points.The BCI has been on a freefall through the entirety of December, but the descent started to pick up more steam during the past couple of weeks.

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Chinese Imports of Tariffed Goods from US Drops -BIMCO

US seaborne exports to China of the goods which China has imposed tariffs on since the start of the trade war fell by 37.6% in the first 11 months of 2019 (11M 2019) compared to the same period of 2017, the last full year unaffected by the trade war. Despite the drop in exports to China, total US seaborne exports of the tariffed goods have risen in the same period, as exports to the rest of the world have compensated for the decrease to China.Overall seaborne volumes of the affected goods to China have fallen by 30 million tonnes in 11M 2019 compared to the 11M 2017.

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Low-sulphur Fuel Sales Surge

The final quarter of 2019 marked a massive decline of high-sulphur fuel oil (HSFO) sales, as the industry transitioned into compliance of the International Maritime Organization's (IMO) 2020 Sulphur Cap (IMO 2020). In Singapore, the world’s largest bunkering hub, the bunker sale landscape saw significant change as the sale of high-sulphur fuel oil dropped tremendously in a matter of months. In contrast, the sale of low-sulphur fuels skyrocketed in the final quarter.The first wave…

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Baltic Index Snaps Losing Streak

The Baltic Exchange's main sea freight index on Friday rose for the first time in seven sessions, helped by an uptick in capesize rates.* The Baltic index, which tracks rates for capesize, panamax and supramax vessels ferrying dry bulk commodities, rose 29 points, or 2.3%, to 1,284 points.* For the week, however, the index recorded its sixth straight fall, declining by 5.4%.* The capesize index rose 92 points, or 3.8%, to 2,493, but still shed 5.4% in the week, its fifth fall…

Photo: BIMCO

IMO2020: Market Uncertainty Brings More Fuel Oil Price Volatility

The oil market has recently been shaken up by geopolitical events, but volatility in the price difference between low and high sulphur fuel cannot be explained by that alone – the uncertainty is the chaos factor.The uncertainty of the upcoming IMO 2020 Sulphur cap regulation (IMO2020) is having a big impact on the bunker market. Whereas, the price for Marine Gas Oil Low Sulphur (MGO LS) has largely remained stable, the price for High Sulphur Fuel oil (HSFO) has been become increasingly more volatile in recent months.

Peter Sand, chief shipping analyst at BIMCO

Baltic Index Inches Lower on Weaker Panamax Demand

The Baltic Exchange's main sea freight index, which tracks rates for ships ferrying dry bulk commodities, inched lower on Wednesday on weaker demand for panamax vessels.The Baltic index, which reflects rates for capesize, panamax and supramax vessels, edged down by 20 points, or 1.1%, to 1,782.The capesize index was unchanged at 3,078 points. Limited activity in both the Atlantic and Pacific basins and the resistance of charterers to current freight rates led to lower market rates, while some fresh inquiries in the Atlantic helped curb losses, Allied Shipbroking said in a note on Tuesday.

Graph: BIMCO

Tanker Deliveries Up 37%: BIMCO

Delivered tonnage of crude oil tankers have grown by +37%, whereas total fleet demolitions for 2019 have slumped to the lowest in a decade with a reduction of 52% from the year before, says BIMCO, the largest of the international shipping associations representing shipowners.Newbuilding orders have remained low through the year with contracted tonnage down by 48%, it said.Amidst a market filled with uncertainty and geopolitical unrest, BIMCO maintains its bearings and turns to the market fundamentals to cut through the mist of market speculation and uncertainty-driven hype.

Caption: Accumulated container volumes on the Far East – Europe trade lane are up 4.6% y-o-y. The CCFI has fallen to an index level of 987, down -9% from the same period last year. 2 (Chart: BIMCO)

BIMCO’s Sand to Offer Boxship Insight in Athens

BIMCO’s Chief Shipping Analyst, Peter Sand, will be speaking and providing the audience with unique insights on the container market at the European Shipping Seminar on November 27, 2019 in Athens, Greece.The European Shipping Seminar, hosted by S&P Global Platts, will discuss the various topics relating to the commercial shipping markets and take a deep dive into how the shipping industry will navigate its way through the uncertain environment of the IMO 2020 Sulphur Cap.Container shipping outlookBIMCO has persistently stressed that trade wars and protectionism are negative for shipping.

Graph: BIMCO

BIMCO Offers Bunker Fuel Price Monitoring

BIMCO has developed a monitoring service for bunker prices, with data provided by MABUX, which is now available to all BIMCO members. The new interactive graphs allow price fluctuations in the major bunkering hubs of Singapore and Rotterdam to be tracked. They will show the bunker prices for 380cST HSFO (high sulphur fuel oil) and MGO LS (marine gas oil low sulfur), both in USD per metric ton, as well as the spread between the two fuel types, with data available since June 2017.

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BIMCO: Shipping Hurt by Soya Bean Trades

Combined soya bean exports from Brazil and the US are down 7.8% in the first eight months of this year, as the main Brazilian soya bean export season disappointed. The fall in volumes from the two countries has also led to an 8.5% drop from last year in the tonne mile demand generated by the two dominant soya bean exporters.In particular falling exports from Brazil have hurt the shipping industry, with accumulated soya bean exports from Brazil in the first eight months of this year 7.8 million tonnes lower than the first eight months of 2018.

Peter Sand, chief shipping analyst at BIMCO (CREDIT: BIMCO)

Baltic Index Snaps 10-day Winning Streak

The Baltic Exchange's main sea freight index fell on Thursday, breaking a 10-day winning streak, as rates for capesize vessels eased.The Baltic index, which tracks rates for ships ferrying dry bulk commodities, fell 19 points, or 0.8%, to 2,499 points. On Wednesday, the index hit its highest since November 2010 at 2,518 points. "We certainly expect freight rates to come down from the highest that we've seen just during the spike now, but remain profitable for the remaining part of the year…

Peter Sand, chief shipping analyst at BIMCO

Capesize Strength Propels Baltic Index to 9-Year High

The Baltic Exchange's main sea freight index climbed to a near nine-year peak on Friday propelled by robust capesize demand, with rates for all the vessel segments scaling multi-year highs.The Baltic index, which tracks rates for ships ferrying dry bulk commodities, rose 101 points, or 4.4%, to 2,378, a peak since November 2010. The main index also posted a 27.3% monthly increase, extending its winning streak to a sixth month.The capesize index jumped 261 points, or 6.2%, to 4,467, a level last seen more than 9 years ago. The index also posted its third weekly gain, up about 11.9%.