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