Dry Bulk Shipping: Heads up for the Baltic Dry Index!
The year 2016 has been a roller coaster for the shipping industry, where the Baltic Dry Index (BDI) has touched record all-time low of 290 points on 10th February 2016. No wonder that this is the lowest since the BDI records began in 1985.
The year of fire monkey did not work much of its tantrums on the Chinese economy where it is still sluggish. However, the good news is that the BDI rose for the fourth consecutive session on Wednesday, on gains across most vessel segments. The overall index, which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser, rose 6 points or 1.99 percent to 307 points.
Container Shipping: Liners are not Punctual in 2016 – says Drewry Supply Chain Advisors!
The containerships have slipped on a reliability scale where nine out of ten trades covered were less punctual in January. This unpunctuality is mainly witnessed in the transatlantic routes, where the ships are affected by heavy snow storms and cyclones.
If you are wondering which carriers are punctual, here is the answer!
Guess who would be in the first slot?
We are sure that you would have rated Maersk or MSC or CMA CGM. While that is not the case here.
We all know that the Japanese are known for their time management and perfection. This clearly reflects where the Japanese carrier MOL maintains the first position with an average on-time performance with 82.7%. Surprisingly, Wan Hai follows MOL retaining its second slot with an average on-time performance with 79.5%. Now comes the big brother, Maersk with all new triple Es. Maersk retained its third place with an average on-time performance with 77%.
So What has Happened to the Tankers?
While the entire world is worried on the downtrend in dry bulk shipping, the shipbuilding industry has pumped in 48 very large gas carriers in 2016 on top of 35 in 2015. This is a real concern for the spot market where very Large Gas Carrier spot rates are near two-year lows, having fallen 68% from last year’s peak.
What do the Dry Bulk Owners Worry About?
The market has been hit by the downtrend in dry shipping rates where the operating cost of a ship is more than the shipping rates rendering the ship owners with empty hands. This scenario has made many owners sell their ships at a very low price, where some even claim that scrapping a ship yields more benefit than to keep it operational.
According to the latest weekly report from shipbroker Intermodal, “the sharp fall in dry bulk rates that has been taking place since the end of last year and has left owners facing historical low rates for a substantial period of time, has now everyone wondering; how long can it last and what are those developments that could expedite the recovery”.
Freezing Oil Output – A Bullish Or Foolish Sign For The Oil Market?
The four major oil producers, Russia, Saudi Arabia, Venezuela and Qatar have agreed to freeze oil output.
Wait!
These four majors have agreed not to freeze complete oil production but to freeze at January 2016 levels. Apparently that was perceived as a bullish sign by the oil market, which rallied in anticipation of some sort of agreement among big oil producers. Initially, that is. Then the skepticism settled in with oil traders tempering their enthusiasm.
While this is at one end, on the other end Iran, following the recent end of sanctions is trying to catch up its market share by pumping more and more! Iran and others including sources from US EIA state that these four major oil producers are freezing output at a level where the production of these four countries has been near an all-time high.
Thus, does this balance the oil market or make it worse?
