John Faraclas
The Capers continue to be damaging for the Dry Markets; the Wets with mixed feelings and Geopolitics… John Faraclas’ brief midweek recap:
The BDI (Baltic Dry Index) lost seven points and now reads 1,337 points thanks to the Panamaxes, the salvor of the day…
The volatile Capers were down 96 points (ninety-six) with the BCI now reading 2,628 points. CAUTION!
The Panamaxes, our most favourite size did save the day with a 35 points plus and the BPI now stands at 1,464 points.
The Supras’ BSI gained 15 points and now it reads 923 points – the projection might be well the 1,000 points soon…
The Handies’ BHSI was up seven points at 520!
Volatility should be carefully monitored; tomorrow we might see some ups, but nothing spectacular! CAUTION as Geopolitics might turn EVERYTHING upside down…
The Wets’ instability continues; the last published BDTI (Dirties) and BCTI (Cleans) gained ten points and lost 20 now standing at 725 and 560 respectively…
All in all shipping is heading to become shipping for the very very very few!
The WTI gone up to US$ 49.33 as these line are being written… approaching the dangerous level of US$ 50…. Whatever over and above this mark you dead well know what it entails…
Offshore Analyst Robert Day has put together a few comments on the recent announcement of Seadrill filing for Chapter 11:
Drilling companies are no stranger to chapter 11, within the last year companies such as Paragon Offshore, Hercules Offshore, Vantage drilling and the George Economou lead Ocean Rig have all entered it.
Now it is the turn of billionaire John Fredriksen’s Seadrill.
Seadrill, like many other drilling companies, have struggled since the oil price plummeted and E&P work dried up. On the 6th July 2014, Seadrill owned 35 offshore vessels, with a total value of USD 12.3 billion. Compared with today’s live fleet value of USD 3,409.28 mil and USD 2,541.18 mil of rigs on order, Seadrill is still in the top 10 of the highest valued offshore fleets in the world.
The offshore behemoth entering Chapter 11 is just another sign of the beleaguered offshore drilling market, with financial restructuring the only tool at the disposal of market players to ensure survival.
Why Seadrill will survive
Seadrill operates a fleet of 29 live vessels and 12 newbuildings and the average age of its fleet is 4 years old. The youthful nature of their fleet is possibly the most important reason Seadrill will survive Chapter 11 restructuring. The last thing lenders, creditors and Seadrill want is modern tonnage hitting the open market at fire sale prices. All this would do is cause rig values to fall and result in significant losses to Seadrill and its financiers.
The Geopolitics are far worse than yesterday; add to whatever we mentions, the forthcoming military exercises of the Russians with Belarus… and see what is coming…
The London International Week 2017 continues re-affirming London’s position as the centre of shipping whether with BREXIT or without…
Caution must be observed with the pollution incident in Greece’s Saronic Gulf which took place over the weekend… and now shakes the environmental and political foundations… As per our usual style we would love to have those involved, particularly from the Ministry of Shipping on a live TV debate… Do they have the guts?
That’s all for now and be on guard from Pirates and Terrorists wherever you are on Planet Ocean… Have a nice evening…
