Home Marine InsuranceCorruption Capers volatility brings the BDI@597

Capers volatility brings the BDI@597

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John Faraclas

John Faraclas

With 30 points plus the BDI closed earlier on today at 597; a turning point? A seasonal rise or what… John Faraclas writes:

The Capers and its respective BCI 2014 with an 87 points plus, now standing at 831, was the talk of the Square Mile echoing the “hidden” optimism down town Akti Miaouli in Piraeus, Broad Street in New York, and at the top …deck of Marina Bay Sands in Singapore, to name but a few shipping centres’ reaction.

The Panamaxes on a more modest pace had its BPI hit 700 points flat – that is 22 points plus since yesterday! The Supras at 514 – up eight and surprise surprise the Handies got their first double digit, 13 plus, now standing at 309 – a cause to celebrate!

All in all an upwards dry market trend but despite the plus figures, being pragmatic, unless we see at least another 1, 600 points added to today’s BDI, equalising more or less that of the end of December 2013 level of 2, 274 points, nothing really changes or matters and caution is your best advice from this medium. The 4, 000 and possibly the 5, 500/6, 000 level might come, but only for the very very few and this is subject to a total reduction of the world’s fleet dry size by at least 30 (thirty) centum. You might think that I have in mind the overcapacity aspect; no, I don’t, as the new technology ships (technologies of incalculable dimensions) expected to enter the market within the next 10 years will turn the market upside down! Then the shit will hit the fan as the majority of the vessels will look completely obsolete…

You might see a pause in newbuilding orders and continued slippages as well as an increase in scrapping, yes scrapping, but reality bites. If you go by this “theory”, you need another five to ten years at least to see the markets rising and these two activities’ correlation wouldn’t make sense, given the state of the Global Economy with the very unstable Geopolitical environment…

The Wets were also on a plus modus; the last published BDTI and BCTI stood at 782 (+ 18) and 514 (+10) points respectively. The daily production and the results in the wider Middle East, will dictate the “tuning” of good earnings and success in the field.

Containerships and their respective companies, big or small, liner or tramp need a revamp. Mind me new technologies and designs are already changing the scene and at the end of the day it’s who charters whom… The box trade will continue to have a future for the foreseeable future but, too many companies around, call for a consolidation here and now. This consolidation is inevitable as technology and new designs, not to mention size and possibly speed again, pull the strings!

LNG and other issues will totally shake the markets.

The WTI stands close to US$ 41 and that is a statement: 41 plus!

On the Geopolitical front, and given how brief we were yesterday, we will elaborate a bit further today:

The Migrants, this shameful issue which has become the world’s number problem, not just for Europe, slides to its own anarchy! Migrants pouring into Europe, instead of being controlled, their number increases and given the improvement of the weather and conversely the sea conditions the influx will soon double. Without backtracking from a previous report, the EU-Turkey deal not only continues to be unworkable, it’s is already null and void. The Turks continue the unethical blackmail against Europe, by continuing to pester Greece. Pestering of any type and kind with an increase violation of Greece’s airspace, being also Europe’s airspace; and the Turks expect to become member state of the EU; NEVER! Expect a mess in the region… Italy “opens” up again with thousands being enroute to its islands and coasts and then into Europe.

The current state of affairs around Turkey might sink one day the sick man of …Europe…! Who wants after all a state which only “occupies” 5 centum of the European continent, the 95 of “its” territory is in Asia and its behaviour so far is contrary to ethics and norm prevailing elsewhere in the Mighty Continent? Who wants after all a state, following the 1923 Treaty of Lausanne, having aspirations of becoming an Empire yet again suppressing every single country in its periphery? Turkey? With the worse record on all counts over human rights? With the worse record over the media? With pooling all the time the strings to destabilize the entire Caucuses region? Who can’t forget the Turkish involvement in Chechnya?  Who can’t see today its behaviour in the Syrian saga? Its relations with neighbouring Russia? With Greece – see above. Save the Kurds living in Turkey and in four more countries next door – Syria, Iraq, Iran, Lebanon… Turkey must conform with today’s reality or else; end of the story. Those who support Turkey and have other designs for the region, as things will develop, they will also turn against Turkey and in particular its despicable current regime.  E N O U G H! Even the majority of the Turkish peope had enough. Neighbours must learn to live in Peace; this is what Turkey must understand!

The EU might enter into a very difficult state given the bad finances of at least six nations with an imminent explosion! Italy creates sets up a bank rescue fund so to speak to save its own banking system; all of Europe’s south is in a mess; and then you tell me about Greece…add the rest of the EU’s economies and problems and you can see how the media honour their masters in portraying Greece and the others as the sick-men (and sick-ladies) of Europe, least to say scapegoats…

BREXIT and GREXIT still on the cards. The “hope” in the United Kingdom now rests with the Labour Party whose leader appeared more than in favour than anybody else; pinch me Anny! June is here already!

Big scepticism over the USA’s presidential elections. Still not clear whom the American People will chose for the final race to the White House; the reason being the uncertainty of domestic and foreign policy: healthcare, education and unemployment adding on confronting terrorism and cost of policing the word. It’s written on the Wall Street though who might be the one and only one the markets really trust! Suspense at its best!

Impeachment of Brazil’s president Dilma Rousseff will take twists and turns until the Brazilian people stand-up to the circumstances; Olympic Games is ante portas and the South America’s most powerful nation cannot have at this moment of its history any major hiccups!

In Africa from north to south, east and west things are getting sour! Libya is becoming more than a liability; add the …”out flux” of Migrants and see for yourself what’s going to happen. It will be yet another migrants-tsunami… and not the dust-cloud from Libya the north Med countries experience! Will the French move in? Algeria too raises issues of concern. South Africa awaits the big change or else… Ghana raises the alarm too! Boko Haram suicide aspect must seriously be adverted…

China in need of a major transition or the boat will run aground. With a slowdown also of economic growth at 6, 7 centum, make your own analyses/calculations… Repeating 1421 is one thing, able to do it in 2016 yet another; tremors will follow….following Japanese earthquakes which concerns us all. North Korea needs to learn how to walk!

The Kashmiri people will test once again the Indian Subcontinent’s stability …and instability with incalculable repercussions!

Afghanistan troubles have already begun – you can see the impact from the refugees and Migrants so to speak cases in Greece!

In Australia things go smoother than first thought; that’s nice to observe!

The Panama Papers, one of the world’s biggest scams, remember this, are the business hooligans excuse to discredit the Panamanian people. Too many skeletons in the cupboard for all; fairs fair!

We could carry on but for sure you need a good night’s sleep; the western hemisphere now reads on! Be on guard and remember that despite all these happenings this is the best time to invest in shipping! You need though to work with your own figures, statistics and insight, as with the previous advice from all the so called gurus, oyu can see what happened in the market and the bankruptcies all over! Any objection? The situation today confirms one hundred centum our view!

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