What a business week-ending that was today with the BDI minus one point at 297, which is also minus 20 points since last Friday’s closing being 317 points and the world economy on fire! John Faraclas recaps a messy week:
The plus …sector:
The BCI 2014, the most volatile of all indices, was up four points at 212 which is just one point up since last week’s 211!
The Panamaxes and the respective BPI index gained six points, which is an overall of eight points plus since last week’s 287!
The minus …sector:
The Supras (BSI) was down nine points, clocking 262 points, 42 down since last week’s 304; sharp overall fall!
The Handies (BHSI) down three at 194 and 25 points down from last week when they stood at 219 points.
Tough times, hopefully soon to end…
The Wets too where on a downwards trend with the last published BDTI and BCTI down two and six points respectively at 800 flat and 650… Last week the BDTI stood at 806, so six points are lost… The BCTI lost 41 when it stood at 650… too much…
For the record, may we remind you the highest ever level of the BDI on the 20th of May 2008, just before Posidonia, and a recent level, that of the end of December 2013, when the index stood at 2, 274 points. We are minus 11, 496 from the all time high and 1, 977 from the end of December 2013 respectively, when our prognosis for a messy 2014 etc., was publicly announced and same come out verbatim onehundred centum true! Now make your calculations and see how much owners contributed to the running of their ships and other parametres and see accordingly what is your next step: sale, layup, use of a special chapter to go scott free…?? Greediness must never ever hit the industry again. It has happened again, but not to this level and extent! We also remind you of the scrap and built scheme 0f 1977/1978 and how same failed to materilaise. It is the various Unions of Shipowners and NOT the “Shipmanagers” who should adhere to these schemes, as in my view they are beneficial; regulation is a must now; OK fine, freedom, but same should be monitored…overflows…are dertimenttal! If somebody is to lose, these are the arrogant bankers, and conversley the banks…
Volatile oil prices brings WTI and Brent close to US$ 31 with a bit of…plus…
Note on the following issues, which can be beneficial:
Now, as we have numerous times written all through the last two years, particularly since mid November 2015:
1)for 2016 there are 9 billion tonnes of cargo to be transported, up 2bn from the Millennium -these are bulk (oil and dry ones), containers, cars, rail-stock LNG, LPG’s you name it, so the most capable ones will get these cargoes and fix their tonnage profitably.
2)There are great opportunities to acquire low priced tonnage from five year old ones, some of them very distressed, to newbuildings at exteremely low prices. The yards too need buyers for abandonded tonnage…
3)Too difficult to obtain orthodox ship-finance.
4)Stock Markets and others sources can be there for you, subject they understand the business of shipping and its future pattern…
All in all a market with good prospects; try to capitulate on this, even if the BDI becomes an absolute zero! By the way, never compare the Liner Trade with tramp shipping…
On the geopolitcs affecting shipping:
The Migrants – the number one issue will give us hte biggest shock; Ukraine still to produce more mess in the entire Black Sea; the Baltic Sea – possible confrontation with the Swedes for a long time facing the Russians; Syria with the Russians and Turks at logger heads, ISIS still there – come on, can’t you decide who is gone to smash them; are you afraid if a or b or c nation or coalition is going to do it? Grow up! China playing a cool game and now very much concerned of its own finances and future development; North Korea being very un-sexy…, Africa very messy, Japan ready for everything, how does Iran fits back… so the shipping industry is on caution!
Now this last para excites me so I have to …confess that the plan all the way to the end is the most important thing on par with Ike’s maxim: “Plan is everything, planning is nothing”… Hope you can find an interesting interpretation for our shipping industry affairs, now stranded at 297 points… Needless to remind you Aesop’s parable of the two frogs – a maritime parable, water being the element… This is the end of the shipping markets as we knew them. The ending is everything and in this instance those who have planned well in advance, taking into account everything (consequences, obstacles and twists of fortune as the book says) will not be taken by surprise by the coming events soon to happen; actually they shape now as you read these lines. Shipping will become the business only for the very very very few.-(<<— fullstop and period).
Finally, that was a very interesting week, basically in London, were the Syrian Affair was “discussed”, the UN Secretary-General delivered an excellent speech at the IMO, Radm (rt It.CG) Cristiano Aliperta gave an excellent speech on the Migrants saga in the Med at the Naval Club organised by the Propeller Club, Port of London. The LSLC event at Holman Fenwick Willan’s auditorium on “Demystifying salvage – changing perceptions in a changing world”, is still the talk of the Square Mile!
Greece goes through the dire straits once again, thanks to the envy of some “friends” and jealous enemies… as the wrong politicians are also in the Greek Parliament, not to mention the current government!
The US Presidential Election will be the most decisive one in human history. Mrs. Clinton has a lot to do and she must have the guts to go until the end. Mr. Trump is the big wonder; what can he do to lead the Republicans in the final race?
South America too problematic and the United Kingdom looks for a better deal with the EU so as to avoid the BREXIT disaster, a disaster for all with incalculable repercurssions for Europe, and why not. Germany’s Angela Merkel is totally responsible for the Mighty Continent’s financial, economic and social mess; can she change the tide? German banks are in a mess too… You have lost Mrs. Merkel !
Have a nice weekend and be on guard for the coming second face of financial, economic and geopolitical Armageddon!