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Market Blues with dodgy geopolitics

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John Faraclas

John Faraclas

The BDI (Baltic Dry Index) closed  earlier on today at 712 – that’s just one point plus since yesterday; the mess in the Middle East and beyond prepares for nasty developments; John Faraclas’ daily recap:

  • The volatile Capers gained 24 points and the BCI 2014 now stands at 1,002 points.
  • The Panamaxes’ though lost another eight points and the BPI now reads 652.
  • Still on the plus modus the Supras gaining just two points and now read 723..
  • The Handies’ BHSI on a plus one, now standing at 433 points.
  • All in all, not the market for great expectations.
  • The Container trade in very bad shape…
  • The Wets with mixed feelings; still low. The last published BDTI and BCTI stood at 515 – plus five and 447 – minus eight points respectively; tough!
  • The price of WTI as these lines are written at 22:00 BST stands at US$ 43,49 – a good drop! Excellent!

Bankrupties,  as we have stressed long ago, are now the name of the …game and the latest problem of Hanjin can be read herebelow from the nice work/report analysis performed by VesselsValue:

With Hanjin Shipping on the verge of bankruptcy, state run Korea Development Bank stated the shipper’s debt stood at $5.5 billion at the end of June (Source: WSJ).

However Hanjin own 63 vessels, worth today $1.7 billion dollars (live and newbuilding contracts). See below for how this is cut for each segment

Hanjin Shipping Fleet

Vessel Type Number of Vessels Total Size Total Value USDm

BULKER

18

      2,162,700

 $                      306.5

CONTAINER

39

          283,286

 $                  1,394.4

SMALL DRY

1

            10,400

 $                          6.9

TANKER

5

            82,800

 $                        54.2

Grand Total

63

     

 $                  1,762.0

HMM Fleet

HMM who is rumoured to be interested in the takeover, only owns 36 vessels.

HMM
Vessel Type Number of Vessels  Total Size  Total Value USDm

BULKER

15

      1,985,500

 $                      283.3

CONTAINER

18

          135,898

 $                      624.2

TANKER

3

          402,600

 $                        58.1

Grand Total

36

     

 $                      965.5

This would bump up the combined fleet value of HMM & Hanjin to $2.7 billion. Even though this sounds a lot, the merged Hanjin & HMM company would only rank 27th in the world in terms of fleet value (COSCOCS coming in 1st with 786 ships worth $20.0 bn).

Container fleets

Hanjin ranks as South Korea’s largest container liner, owning 39 vessels with a total of 283,286TEU worth $1.4 billion. HMM comes in second with 8 container vessels, holding 135,898 TEU, worth $624 million.

Container Alliances by Value

On the Geopolitical front the mess continues and as we have ranked the MIGRANTS the number one issue, from the MIGRANTS expect more mess to come!

The Syrian saga with Turkey’s involvement will produce a wider war with incalculable repercurssions. Turkey continues to blackmail Europe with the visa tip for its citizens to move freely otherwise the EU-Turkey agreement  on MIGRANTS is null and void.

The Russian – Turkish South Stream pipeline will restart. Dirty politics as always. Having been present on the 9th of July 2015 at the Grande Bretagne conference in Athens, I can assure you of real dirty politics, geopolitics, trimmers and governmental clientelism… This is all in record as well as our questions!

The BREXIT saga becomes more refined and hopefully PM Mrs. May will streamline same so BREXIT can go smoothly ahead.

Greece, as we have warned, will enter a very turbulent period. Let’s see who will …dare trigger GREXIT which will save Greece.

Donald Trump suggests that Mexico must pay for the security wall in protecting Mexican entering the US…

Those in Africa, …locals and tourists might be lucky in watching the “Rings on fire”, the special eclipse phenomenon when the moon does not move in a perfect circle around the earth – instead, its orbit is slightly elliptical.

Have a nice evening and be on guard for any eventuality!

 

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