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Friday, 3rd February 2012

Speculation on Specification

Last Friday we promised some insight into who we thought would fill the vacuum of light products left by the closure and likely future closures of refineries in the US Northeast /Caribbean. On Thurs-day this week, with some 25 MRs on subs (not exclusively with us, unfortunately) to move gasoline from North West Europe, we appeared to have our answer. TC2 shot up from WS135 on Tuesday to WS165 today.

Friday, 27th January 2012

What’s all the Golden fuss about?

As China’s importance to VLCC trades grows, so does the significance of China’s Golden Weeks – the 7 day public holidays that accompany Chinese New Year in Spring and National day in October.

Friday, 27th January 2012

Against the grain

The floods in Thailand, a bare winter in Ukraine and a La Nina-induced dry spell in Brazil and Argentina have all had for effect to reduce the overall supply of a number of soft commodities. Mouths to feed, on the other hand, have not reduced in numbers, and may start to lament louder and louder as prices surge.

Friday, 20th January 2012

More supply upheaval in store for tankers

Last year crude tanker owners were forced to accommodate the total loss of Libyan production, a European embargo on Syrian imports, massive disruption to North Sea (and to a lesser extent Brazilian) oil production, an unexpected surge in US tight light oil production, an SPR release and production outages in Yemen and Sudan. In the process they had to deal not just with regional oil price spreads but also a swing in sweet /sour price differentials. Can this year be any more challenging?

Friday, 20th January 2012

Mischievous Rabbit and Calm Dragon

Blessed with a crystal ball was the man, or woman, who could foresee the development of the dry bulk markets at the dawn of 2011. The volatility witnessed last year in the global economy, commodity prices and demand, and ultimately vessel earnings made it one of the toughest to call. It seems to us that 2012 will show more of the same.

Friday, 13th January 2012

2012: tear up the script for MR trades

In the course of advising our clients how the demise of Petroplus, Europe’s largest independent refiner, would affect product tanker freight rates, it appears that two of its five remaining refineries have this week cheated death, for now. No matter – we still maintain that 2012 will see major changes in the trading patterns of MR product tankers. Most will be for the better.

Friday, 13th January 2012

Miners to show coal touch

The International Energy Agency (IEA) this week stated that coal demand will increase at a CAGR of 2.8% in the coming five years but also that much depends on China’s volatile production levels. As with all aspects of the world economy these days, when China catches a cold the world sneezes. Coal still plays the most important role in energy generation globally and developing nations are increasingly hungry for it despite increasing efforts to rely on more efficient, carbon friendly energy. Developing economies will continue to drive the growth in coal demand. China and India still have a long way to go on the urbanisation and electrification path.

Friday, 6th January 2012

Onwards and onwards in 2012

A straw poll of analysts – at least the ones we’ve seen in the press – suggest that crude carrier markets should find a floor sometime later this year. The growing consensus that freight markets are poised to recover (or are already recovering in the case of product tankers!) is actually a little troubling; particularly when one considers the corresponding appeal of ordering a new, fuel efficient ship at today’s heavily discounted levels.

Friday, 6th January 2012

The year that was

This has been anything but a boring year for the dry bulk market. Natural catastrophes, bulging orderbooks, political unrest and a slowing world economy have constituted challenges for the industry throughout. We take a look at how the market has fared over 2011.

Friday, 23rd December 2011

The lows and not-so-lows of 2011

Crude Tankers: An abysmal year across the board. A brief rally in February and early March for VLCCs
and during March for the rest of the crude carrier fleet quickly ran out of steam as Europe elected to draw down stocks in response to lost Libyan production rather than replace with imports.

Friday, 23rd December 2011

Market Report

Read more…

Friday, 16th December 2011

The VLOC Onslaught Begins

For months now China has been arguing with Vale that big is not always beautiful. Vale started to take deliveries of their new floating behemoths in March this year and have since received a further four sister ships from Daewoo, STX and Rongsheng. Yet, Chinese authorities are still refusing entry to Vale’s shiny new toys.

Friday, 16th December 2011

A not so festive look at TD5

A little seasonal cheer for Suezmax in West Africa should help owners forget, for a while at least, quite
how much trouble they have got themselves into.

Friday, 9th December 2011

Is 15 the new 25?

The first double-hulled VLCC has gone for scrap. The Atlantic Liberty (built 1995) is likely to be followed shortly by the Hebei Mountain (built 1995). What if 15 is the new age limit for spot trading VLCCs?

Friday, 9th December 2011

Fertile Growth

Fertilizer demand is predicted to grow annually by 2.1% over the next five years and the number of ships in minor bulk trades is set to shrink by about 3% - this paints a leafy picture for the trade.

Friday, 2nd December 2011

Silly season for NB numbers

Every December we seem to get all excited about the number of newbuildings due to hit the water at the start of the following year. This year the excitement is compounded by the expected reactivation of idled VLCCs and higher steaming speeds in response to rising rates. Here we offer some words of calm.

Friday, 2nd December 2011

Frankly Flawed Assessment

In the context of robust iron ore trade figures and substantial Capesize earnings gains, it has puzzled many in the industry to see FFAs for Capes remaining continuously low. We look at how paper compares to actual earnings?

Friday, 25th November 2011

US refining margins fall: does it matter?

Even before last week’s agreement to reverse the Seaway pipeline, opening up a route for Cushing
crude to reach the US Gulf, the WTI / Brent spread had narrowed dramatically.
That spread has, over the past 11 months, supported remarkably high utilization rates of US Gulf
refineries throughout a period of falling domestic gasoline demand and rising ethanol substitution. It has done this by making exports of both gasoline and middle distillates competitive in foreign markets, and curbing domestic imports of gasoline.

Friday, 25th November 2011

What Does Q1 12 Look Like?

January this year saw over 6 mn Dwt delivered in the over-100 k Dwt segment – 3 VLOCs, 31 Capes and 5 Mini-Capes, a 3% m-o-m fleet growth. This was the strongest January monthly growth on record and rates subsequently tumbled 73% by the end of the month, to under $7,000/day. It leaves us wondering what sort of profile Cape deliveries will follow through Q1 12, and most importantly what impact will these have on earnings.

Friday, 18th November 2011

From Libya with Love

Libyan oil production is set to reach approximately 44% of pre-conflict levels by the end of the year. At
this rate the production of Libyan light-sweet crude would be back to pre-war levels within seven
months. Due to various problems, such as damage to oil fields and peripheral infrastructure, this is
clearly not attainable.

Friday, 18th November 2011

Addition demolition

25 mn Dwt of the total 2011 orderbook is expected to drift towards 2012 delivery. This is daunting but renegotiated delivery dates have been managed for a smoother delivery schedule.
Following on from our assessment on scrapping volumes in our last market comment, we felt it was now appropriate to look at the slippage side in more detail.

Friday, 11th November 2011

Make hay, and be quick about it

VLCC rates are at last improving in the Middle East. To what do owners owe this rare treat?
Rates from Middle East to the Far East have risen in the past week from WS52.5 to WS60, giving round voyage earnings in the region of $12,700/day. From our study of spot fixtures, it is clear that demand for Middle Eastern crude has leapt over the past month. A surge in Far Eastern imports of Middle Eastern crude has been joined recently by an unusual jump in spot fixtures to carry Middle Eastern grades West.

Friday, 11th November 2011

Slip & Scrap

This year we may see up to 26mn Dwt (4% of fleet) scrapped from the bulk carrier fleet. This is the highest amount in decades.