Freight market report & expectations.November 11, 2002.Densay A.S.

Monday, 11 November 2002 14:50:00 (GMT+3)   |  
       

Freight market report & expectations.November 11, 2002.Densay A.S.

Baltic handymax index: 7926 points by September 12, 2002 Baltic handymax index: 9641 points by November 04, 2002 Rise during this period: 21.61% It is observed that all forecasts we made in our last report turned out to be true. As mentioned in our latest report, freight market for Handy/Handymax type ships particularly for cargoes ex-Black Sea and Continent started to show a rising tendency. Recently, it is seen that the rise in freight market has overspread, including Far East, besides Black Sea together with Continent are the areas showing the highest ship demand. Apart from the main reasons for this rising tendency explained in our last report, main point is whether the rise will continue or not. We believe that the ship supply in freight market will keep on facing some serious problems in the short run till the first quarter of 2003. Reasons can be explained as follows: 1-Despite the doubts about the trading volume worldwide, there is still demand from the grain and iron&steel traders. 2- Particularly the European operators who have chartered handymax and other types of ships for 1 year and longer periods with high prices due to their expectation that freight rates will rise have successfully imposed their expectation to the market in order to make profit. 3-As the possibility that the intervention to Iraq may turn into a war including the neighbouring countries still exists, ships to sail that route request premium for freight rates. 4-Freight rates in Far East are increasing by reason of new demands due to better performance seen in Far Eastern economy than expected. 5-Shipowners, believing that there will be a price increase in the freight market, have ordered new ships from the Far Eastern shipbuilding yards. Because the earliest delivery date given by these shipbuilding yards is year 2005, it is stated that the positive expectations will exist for a definite period of time. Especially the modern 40'000mt and over deadweight ship supply in Continent and Black sea markets is facing serious problems. Because freight rates are high enough, we recommend the producers and traders to follow up very closely the best fit number of ships for their position together with other cargoes, through their brokers. When number of cargoes are more than number of ships available, shipowners know how to capitalize on the situation, therefore it is always possible to find a vessel with best price in the spot market. According to our sources: A producer booked 40'000mt Dubai+Abudabi rebar cargo at a freight rate of $25.25/mt. A producer is in the market for a cargo of 45-50'000mt Nemrut/2 port Persian gulf at a rate of around $25.00/mt. However indicative freight rates are around $27/mt. A producer booked 44'000mt Diliskelesi/2 port Persian gulf cargo at a freight rate of $25.50/mt. A producer booked 30'000mt Nemrut/Jubail cargo as a part cargo for a Panamax type ship without crane at a freight rate of $25.00/mt. Indicative freight rates for ships 40-45.000 dwt ex-Black Sea with destination Far East have risen to 15'000mt from around $13.000. In case a redelivery from Persian gulf is considered as the total lead time is very short and an interference to Iraq and the possibility of a rise in war premiums is still in charge daily rates are around $16.500. Freight market for scrap shipments for Continent/ Turkish ports: Forecasts stated in our previous report have been realized for this region as well. As from today, Continent market is the strongest region in the freight market. Apart from steel scrap grain, cement, steel and other goods are disposed to the market almost everyday. Since there are no suitable vessels in Continent market, vessels in Mediterranean area and even at West African ports are ballasted to Continent market. Continent / USA gulf daily freight offers are around $9.000-9.500 Continent / Mediterranean scrap offers reached to a level of $11.000 from $9.000 Continent / Far East freight offers reached to a level of $13.500 from $12.000 Latest booking reports: A producer paid a freight rate of $13.50/mt for a UK/Nemrut cargo with 52 stowage. A producer paid a freight rate of $14.50/mt for a cargo of Continent/Diliskelesi with 55 stowage. A producer paid a freight rate of $14.50/mt for a cargo of Continent/Nemrut with 55 stowage. Naporano booked 45'000mt USEC/Nemrut cargo at a freight rate of $14.55/mt with low stowage. Latest market reports: Hugo Neu is in the market for his 45'000mt scrap cargo of USEC/Diliskelesi with 44 stowage at a freight rate of $14.50/mt. A producer is in the market for his 30'000mt cargo of UK/Nemrut with 47 stowage. A producer is in the market for his 30-35'000mt cargo of Continent/Diliskelesi on freight basis. According to our sources, 7 scrap cargoes booked for shipments between 01 November – 01 December will be shipped from Continent ports. Our recommendation to potential charterers is to complete their fixtures timely before falling into spot market as it is risky to find a vessel in the spot market and in any case currently the chances of finding a suitable vessel are very limited even when higher freight rates are offered to shipowners. DENSAY DENIZCILIK VE TICARET A.S ATASEHIR BULVARI 42 O BLOK KAT 16 ATASEHIR 81120 ISTANBUL / TURKEY TEL : + 90 216 455 35 95 FAX : +90 216 455 35 99 COMTEXT A45TR651 TLX : 36897 e-mail: densay@densay.com

Similar articles

Downtrend reverses in Pakistan’s import scrap segment

27 Mar | Scrap & Raw Materials

Pakistani buyers delay new scrap bookings as mood in finished steel segment falters

06 Mar | Scrap & Raw Materials

Turkey’s deep sea scrap market set to show clearer trend next week

01 Feb | Scrap & Raw Materials

Import scrap prices in Pakistan expected to rise further, demand not supportive

10 Jan | Scrap & Raw Materials

Taiwan’s import scrap market softens further despite positive rebar sales situation

05 Jan | Scrap & Raw Materials

Import scrap trade remains muted in Pakistan, prices mainly unchanged

03 Jan | Scrap & Raw Materials

Taiwan’s import scrap market softens as rebar trading slows down

29 Dec | Scrap & Raw Materials

Australia’s Green Steel of WA to build green steel recycling mill

28 Dec | Steel News

Import scrap activity in Pakistan muted due to European sellers’ absence, Red Sea crisis

27 Dec | Scrap & Raw Materials

SteelOrbis year-end review: Turkish steel industry experiences an even more difficult year in 2023

25 Dec | Steel News