Peter Sand News

20 May 2020

China to Europe Container Spot Rates in Rare Reversal -BIMCO

© urbans78 / Adobe Stock

Throughout April, container shipping spot freight rates on the back-haul trade from North Europe to China were higher than those on the front-haul trade from China to North Europe. This is a rare occurrence that has developed in the wake of the massive supply chain disruptions in the world’s top manufacturing hub due to the COVID-19 outbreak, causing aftershocks across the Far East.“A reversal of front-haul and back-haul spot freight rates is a rare event. Especially on a high-volume main trade route like the Far East to Europe…

11 May 2020

BIMCO: 2020 and the Collapse of Bunker Fuel Markets

Source: BIMCO

The sulfur regulation from the International Maritime Organization (IMO) that came into force on 1 January 2020 took the center stage in the shipping industry at outset of the new decade. Four months on, the spotlights have turned to the coronavirus and the OPEC+ oil price war.The outlook for global economic growth remains bleak as the world is faced with the largest recession since the Great Depression in the 1930s.Commodity prices have declined across the board and most recently…

07 May 2020

US Barging Industry Navigating Black Swan Events

(Photo: Campbell Transportation Company)

The combination of the coronavirus pandemic and oil price freefall have affected most maritime markets, including inland waterway shipping. Looking at U.S. river transport in particular, the impacts of these two black swan events vary greatly depending on the type of cargo being carried.David Grzebinski, CEO of the America’s largest tank barge operator, Kirby Corp., said in a March conference call that petrochemical customers have driven the market higher as plants and refineries look to shore up their supply chains amid current market upheavals…

30 Apr 2020

Three of Five Converted VLOCs Are No Longer Operating -BIMCO

© Zdenar Adamsen / Adobe Stock

Converted very large ore carriers (VLOC) are increasingly becoming a thing of the past with the long-term freight contracts coming to an end as newer and more reliable ships replace them in the market. Since June 2017, 43% of the VLOC fleet have been sent to the scrapyards, while 18% of the fleet is idled or damaged.“The tragic Stellar Daisy accident brought the safety aspect of VLOCs into question. Now, three years on, three out of five VLOCs are no longer in operation as their long-term charters have now expired.

23 Apr 2020

Overcapacity and low demand growth set the tone in the 2010s -BIMCO

Over the past decade, the developing world economy has allowed for strong growth in shipping activities, with the demand for transport never having been higher. However, the benefits of this growth have been limited due to the industry jeopardizing the good times by ordering too many ships.In the 2010s, the supple of ships has largely outgrown demand, putting freight rates under pressure persistently and causing challenging conditions for the dry bulk market. A total of 413 million DWT has flooded the marked since the turn of the decade…

08 Apr 2020

Coronavirus Disrupts Supply of Ships and Demand -BIMCO

© Carabay / Adobe Stock

The coronavirus outbreak has affected all aspects of the shipping industry, lowering, if not wiping out, demand growth prospects for the year across all segments. The outbreak has also affected fleet development, says shipping association BIMCO.Contracting activity has fallen, demolition activity, which had been high, is now being limited by restrictions around the world and deliveries of new vessels are delayed.“The coronavirus has certainty replaced the IMO 2020 sulphur regulation as the talking point of the year.

02 Apr 2020

While Oil Prices Plummets, Tanker Rates Fly High

Source: BIMCO, Clarksons

If one ever needed proof that, no matter how dire the situation, there is always a silver lining, look no further than the crude tanker market, which has seen it day rates skyrocket in the face of a global pandemic that has effectively ground world commerce to a crawl.As is the case with other gravity defying business phenomena, geopolitics is a central factor, in this case a battle between Russia and Saudi Arabia to flood the world with oil in the face of declining demand and…

19 Mar 2020

Shipping Not Immune to a Pandemic -BIMCO

© donvictori0 / Adobe Stock

The World Health Organization (WHO) has declared the outbreak of the novel coronavirus a pandemic. There is little doubt that this will have significant implications for the shipping industry. But to what extent? BIMCO expects that the strict containment measures imposed by governments around the world will result in substantially lower global economic growth and consequentially, lower demand for shipping. Container and dry bulk shipping are at the front line when it comes to feeling the fallout…

19 Mar 2020

Baltic Index Inches Higher On Capesize Demand

© masterskuz55 / Adobe Stock

The Baltic Exchange's main sea freight index inched up on Thursday, as stronger demand for capesize vessels offset a fall in panamax and supramax vessel rates.The Baltic index, which tracks rates for capesize, panamax and supramax vessels that ferry dry bulk commodities, was up by a point, or 0.2%, at 630.The capesize index rose for the fifth straight session, gaining 38 points to -166.Average daily earnings for capesizes, which typically transport 170,000 tonnes-180,000 tonnes cargoes including iron ore and coal…

18 Mar 2020

BIMCO Revises 2020 Forecast

© Igor Yu. Groshev / Adobe Stock

The coronavirus pandemic is impacting global shipping demand for 2020 negatively. The speed of the virus spread makes it difficult to assess the full consequences. Nevertheless, we see a need to update our 2020 forecast to make some of this massive uncertainty tangible.What is going on in addition to the coronavirus pandemic?Geopolitical tensions that made the OPEC+ alliance break down, has subsequently made the crude oil tanker spot freight market erupt. The events that followed the breakdown - and those that are likely to follow…

12 Mar 2020

BIMCO: US-China “Phase One” Fails to Boost Trade Volumes

© Oleg/AdobeStock

Even before the effects of the coronavirus, the ‘Phase One’ agreement between China and the US failed to boost volumes of the implicated goods in January. In fact, exports of the manufactured, agricultural and energy goods included in the deal were down 26% from January 2017, which serves as the base year for the agreement.The ‘Phase One’ agreement which was signed on 15 January 2020 to lowered some US tariffs on imports from China, which in return has committed to increase its imports from the US.

11 Mar 2020

Baltic Index Hits 1-1/2-Month High

© MagioreStockStudio / Adobe Stock

The Baltic Exchange's main sea freight index on Wednesday hit its highest in more than a month, lifted by an uptick in rates for capesize and supramax vessels.The Baltic index, which tracks rates for capesize, panamax and supramax vessels that ferry dry bulk commodities, rose 4 points, or 0.6%, to 631 - its highest since Jan. 21.The capesize index fell 3 points to -350.However, average daily earnings for capesizes, which typically transport 170,000 tonne-180,000-tonne cargoes including iron ore and coal…

10 Mar 2020

Capesize Remains Submerged in the Depths of Despair

© Eugene Sergeev / Adobe Stock

While the Capesize segment has been massively impacted by the coronavirus, the smaller dry bulk segments are starting to recover towards profitable territory, partly on the back of seasonally higher grain exports from South America. Nonetheless, as the coronavirus continues to spread, the risks are skewed towards the downside.Capesize remains extremely unprofitable, but what about the rest?The Baltic Exchange Capesize index drew headlines lately, as it, for the first time ever, went into negative territory.

21 Feb 2020

Baltic Index Posts Gain, But Shipping Activity Slows

© masterskuz55/ Adobe Stock

The Baltic Exchange's main sea freight index rose for a fifth straight session on Friday, ending higher for a second straight week, as vessel rates rose despite concerns over the impact of coronavirus on global growth.The Baltic index, which tracks rates for capesize, panamax and supramax vessels that ferry dry bulk commodities, rose 17 points, or 3.5%, to 497.The index posted gains for a second straight week.The capesize index, which tracks vessels that typically transport 170…

18 Feb 2020

Baltic Index Jumps to 2-Week High

© masterskuz55 / Adobe Stock

The Baltic Exchange's main sea freight index rose to a two-week high on Tuesday, as higher rates for panamax and supramax vessels more than offset the capesize segment lingering in the negative zone.The Baltic index, which tracks rates for capesize, panamax and supramax vessels that ferry dry bulk commodities, rose 16 points, or 3.7%, to 450, registering its biggest one-day percentage gain since late November.The capesize index gained for a second straight session, up 30 points at -257."Capesize is gradually gaining because there are other geographies besides China…

05 Feb 2020

Capesize Index Turns Negative for the First Time Ever

©  Mike Mareen / Adobe Stock

Capesize index plummets to -133, the first time ever in negative territory – is it all up from here?The Baltic Exchange Capesize Index (BCI) dropped to -133 index points on February 4, 2020, turning negative for the first time ever on January 31, 2020. The composite BDI index (BDI), which has excluded the more stable handysize segment since March 2018, also dropped on February 4, 2020 to settle at 453 index points.The BCI has been on a freefall through the entirety of December, but the descent started to pick up more steam during the past couple of weeks.

30 Jan 2020

Capesize Slumps, Coronovirus Pull Down Rates

© papa1266 / Adobe Stock

The capesize component of the Baltic sea freight index plunged to an all-time low on Thursday, hurt by high fuel costs owed to new shipping regulations and a seasonal slowdown worsened by a coronavirus outbreak.The Baltic index, which tracks rates for capesize, panamax and supramax vessels to ferry dry bulk commodities, fell 27 points, or 5.1%, to 498 — its lowest level in over 3 years.The capesize index dropped 92 points, or 98.9%, to a record low of 1 point, extending its losing streak to a 35th straight session.Average daily earnings for capesizes…

17 Jan 2020

Low-sulphur Fuel Sales Surge

© vladsv / Adobe Stock

The final quarter of 2019 marked a massive decline of high-sulphur fuel oil (HSFO) sales, as the industry transitioned into compliance of the International Maritime Organization's (IMO) 2020 Sulphur Cap (IMO 2020). In Singapore, the world’s largest bunkering hub, the bunker sale landscape saw significant change as the sale of high-sulphur fuel oil dropped tremendously in a matter of months. In contrast, the sale of low-sulphur fuels skyrocketed in the final quarter.The first wave…

16 Jan 2020

Baltic Index Reverses Course, Gains

© Valentin Kundeus / Adobe Stock

The Baltic Exchange's main sea freight index reversed course to inch up on Friday after 21 straight session of declines, helped by higher earnings for capesize vessels.The Baltic index, which tracks rates for capesize, panamax and supramax vessels that ferry dry bulk commodities, increased 2 points, or 0.3%, to 774 points.The Baltic index started falling on Dec. 4, and continued its slide for 20 more consecutive sessions. On Friday, the index was still at its lowest since April 17.There has been a dramatic decline in the Baltic index because of a fall in all segments on seasonality…

02 Jan 2020

Baltic Index Marks Worst Day in 6 Years

© MagioreStockStudio / Adobe Stock

The Baltic Exchange's main sea freight index on Thursday posted its biggest one-day percentage decline in six years, pressured by depressing demand for dry bulk vessel segments.* On its first day of trading in the new year, the Baltic index , which tracks rates for capesize, panamax and supramax vessels that ferry dry bulk commodities, fell 114 points to 976 points, its lowest level since May 2019.* The overall index declined about 10.5%, posting its biggest one-day percentage drop since January 2014.* "Some of it represents the fact that it is the first quoting for almost a week now.

22 Nov 2019

Baltic Index Snaps Losing Streak

© Aleksey Stemmer / Adobe Stock

The Baltic Exchange's main sea freight index on Friday rose for the first time in seven sessions, helped by an uptick in capesize rates.* The Baltic index, which tracks rates for capesize, panamax and supramax vessels ferrying dry bulk commodities, rose 29 points, or 2.3%, to 1,284 points.* For the week, however, the index recorded its sixth straight fall, declining by 5.4%.* The capesize index rose 92 points, or 3.8%, to 2,493, but still shed 5.4% in the week, its fifth fall…

08 Nov 2019

IMO2020: Market Uncertainty Brings More Fuel Oil Price Volatility

Photo: BIMCO

The oil market has recently been shaken up by geopolitical events, but volatility in the price difference between low and high sulphur fuel cannot be explained by that alone – the uncertainty is the chaos factor.The uncertainty of the upcoming IMO 2020 Sulphur cap regulation (IMO2020) is having a big impact on the bunker market. Whereas, the price for Marine Gas Oil Low Sulphur (MGO LS) has largely remained stable, the price for High Sulphur Fuel oil (HSFO) has been become increasingly more volatile in recent months.

30 Oct 2019

Baltic Index Inches Lower on Weaker Panamax Demand

Peter Sand, chief shipping analyst at BIMCO

The Baltic Exchange's main sea freight index, which tracks rates for ships ferrying dry bulk commodities, inched lower on Wednesday on weaker demand for panamax vessels.The Baltic index, which reflects rates for capesize, panamax and supramax vessels, edged down by 20 points, or 1.1%, to 1,782.The capesize index was unchanged at 3,078 points. Limited activity in both the Atlantic and Pacific basins and the resistance of charterers to current freight rates led to lower market rates, while some fresh inquiries in the Atlantic helped curb losses, Allied Shipbroking said in a note on Tuesday.

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