Chartering
Freight Indices have shown consistent signs of improvement, the Container Charter market is moving in a different direction with each week demonstrating a further downward trend albeit in small steps in most cases with some usual exceptions. Owners are actively aiming to secure longer period employments as we see vessels positioning from East of Suez to the Atlantic, where vessel supply is more balanced and less responsive compared to the market in the Pacific.
On the other hand, Operators are in most cases only covering their prompt requirements and are willing to wait, which may hint at disbelief regarding the future market developments and earnings as across all recently reported Q2 results, the picture is pretty much the same.
Whether this leads market participants to panic or whether it is just a new normal is up for judgement. But after two record years of liner earnings and most Owners still benefiting from multiple long term coverage at very lucrative rates. It was always clear that at some point the market would correct but it still appears many are being hit by surprise. Activity remains limited in the post-Panamax and Panamax sector.
While reports surfaced last week, further details have now emerged regarding the two baby-Panamaxes – sublets from ZIM -that Maersk Line was said to have taken. The first one being a Samsung 4000 ‘ALEXANDER BAY’ (4,253 TEU, built 2003, Samsung H.I.) which managed to obtain a rate of $18,150, obtaining a discount considering the lengthier period of 9 to 12 months. The second unit a CS 4250 ‘KOTA LAGU’ (4,250 TEU, built 2006, CSIC: DALIAN SHIPBUILDING CO) secured a shorter employment of 3 to 5 months at $19,250. It is evident that the available supply of sublets continues to influence the achievable rates and durations, resulting in a slight decline. Similar types are currently under close negotiations with details yet to be confirmed.
In the sub-Panamax segment we continue to see an increase on the supply side which is mainly driven by offered relets in the Pacific with a difficult Intra-Asia market. One Hyundai Mipo 2800 was fixed on subjects but ultimately failed on subs as the requirement was covered by internal tonnage. In the Atlantic and as indicated already, the Samsung 2500 ‘MAIRA’ was extended by Hapag Lloyd for a 12 month duration at private terms.
In the Feeder sector, CMA CGM was associated with the extension of the Wenchong 1700 ‘HANSA HOMBURG’ (1,740 TEU, built 2009, gearless, CSSC: GUANGZHOU WENCHONG) for an additional 6 to 9 months, serving its Bay of Bengal dedicated service at a rate of $11,500 which reflects a big drop to last done but just reflects the current market. The Imabari 1700 type ‘KYOTO TOWER’ (1,708 TEU, built 2007, gearless, IMABARI SHIPYARD) – sublet from Wan Hai Lines – also renewed its charter with Evergreen for its South East Asia services for a similar period but at an undisclosed rate. CMA CGM was linked to have extended the MRC 1100 – II ‘ATLANTIC SILVER’ (1,355 TEU, built 2008, geared, JIANGSU YANGZIJIANG ) for 2-5 months at a reported rate of $12,850 whereof the sister vessel SATURN was able to secure a 6-8 month period with Nirint Lines at a firm rate of $13,000.
In the smaller feeder segment, several 1100 TEU vessels were fixed on private and less favourable terms compared to what was seen previously and is currently a segment under pressure particularly in the Pacific. Unifeeder was linked to having secured the ‘VEGA ALPHA’ (917 TEU, built 2005, gearless, Bodewes ‘Volharding’) for 9 to 12 months at a modest rate of $9,250, including vessel’s positioning from Colombo to the Continent.
S and P
Amongst other transactions, Seaspan announced the purchase of two 8,100TEU Imabari sister vessels built in 2008 ‘ONE COSMOS and ‘ONE CONTINUITY’ (8,102 TEU, built Imabari 2008) at an aggregate purchase price of $54,400,000 from their co-owner Ocean Network Express.
Otherwise, the market is still yet to find its feet, and we are now seeing some post-Panamax tonnage now being widely circulated in the market with ideas substantially below last done. Something not seen for a number of years. Equally, it is true to say that there remains a fair bit of enquiry parked on the side-lines, so if the charter market does show clear support there is the possibility that prices stabilise quickly The reported sale of ‘BLUE OCEAN (629 TEU, geared, built 2008 Huanghai Shipyard) to Philippine-based operators at low $7mill demonstrates that niche geared tonnage is still managing to command premiums simply due to the lack of other options for a buyer. The Sellers have held out for some time for these levels in the face of a generally declining market.
Two 1,500TEU vessels were also committed for recycling late this week, prices from the Indian subcontinent continue to come under pressure and cash buyers are increasingly reluctant to engage on vessels that are not for fairly prompt delivery because of perceived downside risk. There are a number of other container vessels in the demolition markets which are yet to call for offers but there is little to suggest that this trend will not continue.
Did you subscribe to our daily newsletter?
It’s Free! Click here to Subscribe
Source: capital link
