A Capes Market; caution!

John Faraclas

The BDI (Baltic Dry Index) ended up earlier on today with 54 points plus since yesterday, – thanks to the Capes, and now stands at 1,476. Geopolitics still turbulent; John Faraclas brief daily recap:

The Capes’ BCI on an upwards …spree; the BCI gained 174 points and now stands at 2,478. Interesting but dangerous too…

The Panamaxes’ BPI fell two points and now reads 1,336; a big caution here!

A continuous fall by the Supras brought the BSI down to 1,025 – minus nine points!

Minus four points for the Handies’ BHSI, now reading 571 points…

So all in all a Capes Market and that’s worrying, as very simply: it doesn’t reflects the real market sizewise!

The Wets with mixed feelings yet again; the last published BDTI (Dirties) and BCTI (Cleans) stood at 705 – minus seven and 500 – plus four points respectively; the latter a good sign as it reached the 500-point threshold.

The WTI, as these lines are being written, fell to US$ 73.68… we all hope for the WTI per mare per terra to drop-down to US$ 49.99; that’s the highest level acceptable and sustainable by the masses all over Planet Ocean!

Meantime, here below is VesselsValue & ViaMar’s Market Asset Value Forecast for Q2 2018. Titled: LR1 Tankers, Handysize Bulkers and Panamax Containers: Q2 Forecast winners promises a great read and thought:

The price of prime aged vessels is expected to rise over the next two years. Putting extended trade disputes aside, most market segments have favorable tailwinds. The contraction of yard capacity is expected to support the replacement value of ships, while short term earnings have either bottomed, or started to recover in most markets. The charts below show the expected performance of a fixed age five-year-old asset. Vessel specific forecasts are available to subscribers. Tanker asset values look set to climb as the current culling of the fleets older units will help lead to a finer balance between supply and demand. The decision by OPEC and Saudi Arabia to put more barrels into the market should increase the cargo count in the Arabian Gulf. This will lead to a rosier outlook for the second half of the year than many predicted.

LR1s look poised to see the highest gains. The run up in demand for distillate flows ahead of the 2020 bunker switch over should benefit large clean product tankers. LR1s are currently seeing depressed asset values, and the expected value on mean reversion alone should benefit owners.

Dry bulk asset values are seeing the benefit of a higher earnings environment brought on by a steady rise in ton mile demand and fleet recycling efforts in 2016 and 2017. Upside remains as scheduled deliveries of outstanding orders are moderate.

The containership market should see a rebound as the consolidation of commercial controllers is leading to more sustainable rate structure. Asset values are expected to retain their increases through the end of the forecast window due to the small orderbooks in most segments (ULCV excluded).

Turbulent Geopolitics with: MIGRANTS creating political havoc – about to bring down governments and coalition governments; The entire Middle East is still on fire and will soon become a total loss – or better say a CTL..; Turkey will bother us on all fronts; Greece will enter  a period similar to a point of no return unless…; The BREXIT creates tidal waves on all fronts – EU workers rights, fishing rights, you name it; the Cracks in the EU deriving all from the MIGRANTS and economic discontent! The Austrian worries, the Polish justice saga, the forthcoming Italian financial “earthquake” which will make Etna and Vesuvius look …saint’s mountains. AND the Thai boys at that  flooded cave now safe!!

Football produced great games at the World Cup in Russia with England and Sweden to meet on Saturday after decisive wins over Colombia on penalties and Switzerland on a straight game…

In the meantime have a nice evening and continue to remain on guard protecting yourself from Pirates, Terrorists and  Criminals  of any kind wherever you are on Planet Ocean!

BDIGeopoliticsWorld Cup 2018 Russia