John Faraclas
Shipping Markets: The Reds are here to stay…
The BDI (Baltic Dry Index) fell 34 points losing also the 1,700 points threshold in a week’s time! At 1,697 seems vulnerable and ultra-CAUTION should be observed. Geopolitics are the name of the game in all fronts and as News is what they don’t tell us, do please take cover. John Faraclas’ daily and weekly recaps:
On a weekly basis the BDI lost 104 points – from 1,801 (25/10). So two …thresholds lost!!!
The Capes’ BCI with its interweek volatility managed to stay close to the 3,000 points despite losing this important level, lost 28 for the day standing at 2,950 and 59 for the week (down from 3,009 last Friday).
The Panamaxes did bad; the BDI lost 30 points and now reads 1,513; on a weekly basis the losses were proportionally high – 182 points lost from 1,695 (25/10).
The other “major” loses” were the Supras’ with the BSI down 46 at 1,045 points; the weekly loss was 142 points – down from 1,187!
Considerable losses for the Handies’ BHSI; on the day the losses stood 11 points- down to 580 and on a weekly basis 51; down from 631 with the valuable 600 points threshold lost!
The Wets too were on a downwards mode; the last published BDTI (Dirties) and BCTI (Cleans) stood at 1,029 – down 11 and 687 – down six points respectively. The weekly losses stood 156 for the Dirties (from 1,185) and 55 for the Cleans – from 742 points respectively…
CAUTION CAUTION CAUTION …without a coma or full stop in between…
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On the S&P front and following our 25th of October reference on the value of the four main categories in the dry sector, tonight we have some exceptional news by VesselsValue on the Tankers and particularly on the VLCC’s:
For the first time since January 2016, the VV value of a resale VLCC has gone above $100m ($101.36m as of GMT 0936 1st Nov 2019).
The last time we saw these levels was between May 2014 –and Oct 2015. Before this it was during the super cycle of 2007/2008.
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One of the major drivers of this change is the charter rates, which have increased over 1000% since 15th September 2019, peaking just above USD 200,000 per day on the 11th October, levels that have not been seen in over 10 years.
Although this has stabilised, it has had a profound effect on values. VesselsValue figures suggest a 20yo (1999 built) VLCC has experienced the most significant change, rising in value by c.27% since mid September.
A number of deals have been concluded in this recent high earnings market, beginning with the 2010 Japan built Nagaragawa which sold on the 3rd October for USD 48.00 mil, versus her VV value today of USD 52.78 mil. This was followed by the 2000 Japan built DS Commodore which sold one week later for USD 22.00 mil, VV value today USD 24.1 mil. However, the sale that got everybody talking was Ridgebury’s en-bloc deal of three 2001 built ships for USD 98.00 mil (USD 32.60 mil each).
Daily updated valuations, transparency and accuracy are critical in these times of market volatility.
More information is available to clients on the VesselsValue platform.
The WTI as these lines are being written stands at US$ 56.21; it was all through the week on a falling mode and went yesterday down to US$ 54.18. Last week it stood at US$ 56.66, so we are back to …square one with last week’s levels. Disappointing!
The Geopolitical situation got worse and we advise ultra-caution.
Migrants, The Environment, Trade uncertainty due to Trade Wars and various types of Terrorism will keep us busy and we must respond before it is too late… Add the ten hot spots from Gib to Afghanistan and from the Caucuses to the Horn of Africa…with Turkey causing headaches for all of its neighbours… Add the BREXIT enfolding events and the outcome of the elections on the 12th of December in the United Kingdom and see what you will get! As we have stated many times we live in interesting times and soon we will witness an unprecedented multi-facet war, so the old Greek maxim will shine once again: “War Father of all; if you don’t destroy you cannot rebuilt”, this is the pitiful message from history…
More specifically:
The MIGRANTS issue takes incalculable dimensions given the complete incompetency of the political establishment – including the Diplomats, Commissioners et al, particularly in Europe and the entire Mediterranean Sea. There is NO excuse whatsoever as they have all failed spectacularly on the issue. It will become a boomerang if we don’t tackle same here and now. At least at the other side of the Atlantic USA’s president Donald Trump is taking measures to protect the American people. In Europe this very moment we are subjected with an unknown three-digit number of ISIS terrorists who “disappeared” from captivity in many Syrian based prisons and camps following the Turkish invasion… to exterminate the Kurds and many more others who come daily from the Anatolian coast of Turkey to the Greek Islands as Migrants under cover and then on to Europe severely damaging the social cohesion of the Mighty Continent! Over the last four months 40,000 (fortythoudsand) Migrants arrived in the Greek Aegean Islands. ENOUGH!!! The locals there as well as in other parts of Greece DO NOT WANT them any more as their patience with Brussels has ended; these MIGRANTS are not just from Syria’s eight-year war; they come from all over the place and president Erdogan “sends” them on purpose to Europe. We repeat once again our remedy to halt and contain this catastrophe: Only with a Naval Blockade, with a Mandate and Rules of Engagement this issue will end; same should apply all over the Med including the Aegean and the Black Sea. Remind you also that many chose to cross even the land frontiers at the Evros River – which divides Greece and Turkey! Greece, Italy, Malta and Spain are the main victim countries of this MIGRANTS mess.-
The situation from Gibraltar to Afghanistan and from the caucuses to the Horn of Africa gets worse every single day. There are many spots: Catalonia, the Entire Northern Africa with lawless Libya, the messy Italian politics, the Balkans in full turmoil; Greece and Cyprus being pestered by Turkey; Albania, Kosovo and Serbia another three points ready to ignite. The Russians are also trying to influence this regions and Turks using religion and other luring dirty means stir up the situation. SHAME! NATO and the European Union MUST intervene as this will greatly help the entire East med region under multiple threats… The classic and long standing Middle East problems continue… The Arabian peninsular too is in a mess. Iraq, Iran too…
CAUTION CAUTION CAUTION as we need the Planet’s Dire Straits to remain open…. You never ever know what might happen.
BREXIT looks likely will develop in an orderly way but we are still far away as we don have the RWA and RWAD in order; very simply none of the tow sides is in all respect ready to deliver BREXIT!!! Let’s see how the 12 December elections develop; will there be an overwhelming majority by any winner?
At the other side of the Atlantic the impeachment of USA’s president Trump continues; expect a spectacular result! meantime the recognition of USA’s House of Representatives recognising the Armenian mass slaughter by the Turks was yet another blow for president Erdogan! That was one of the most despicable genocides in World History! The USA – Turkey relationship is in now a very critical point!!!
Lets see what happens with Alberto Fernandez, another Peronista in power down in Argentina…
Venezuela looks quite but that not the case
Bolivia’s president Morales was re-elected but only just!
In Chile things went on the extreme and as a result the summit for Asian and Pacific leaders has been cancelled and looks likely the one in December for Climate Change… CAUTION as the people had enough
Caution for both India and Pakistan over Kashmir… Let the nukes threat NOT be the last resort…
Hong Kong’s latest uprising not yet solved; CAUTION!
In Africa mind the new turmoil in Algeria; will a new revolution takes place after 65 years of independence from France?
In the Banking and Finance world we have two women starting new posts today; Christine Lagarde who took over from Mario Draghi as president of the ECB – European Central Bank; she’s faced with moribund Eurozone… Can she create stability? Can she get Europe out from the current recession – for those who don’t understand economics, finance and banking : we are in Recession! The other lady is Alison Rose who takes over as CEO of the Royal Bank of Scotland and I am pretty sure we are going to witness a management shake-up; I am positive she will succeed Watch this space!
Ah we have another Banking appointment coming up soon: who will take over as Governor of BoE when Mark Carney leaves? Can a woman win this position too?
On another tone and note as we learn from Greece, the AMVER Awards in Athens tonight was more than a success. The Propeller Club produced an excellent event and many Congratulations to its new president Costis Frangoulis and all the Governors – old and new ones, for producing a memorable event! This year 217 Greek shipping interests companies were honoured contributing with 2009 vessels participating in the AMVER program; what an achievement!
Tonight also – Cayman Islands time is the end of a super successful WISTA International AGM and Conference; a very exciting one. will revert with a full account! Next WISTA International event in Germany; Hamburg being the host city-port!
Next week (4-6 Nov) we have the 40th anniversary of the World Travel Market in London’s ExCel! An event NOT to be missed given also the importance of Maritime Tourism – Cruises all over Planet Ocean being the main attraction!
IMA UK’s Diwali event comes next on the 5th of November in collaboration with WISTA UK; an event not to be missed
Then at the 35th Anniversary of the Costas Grammenos Centre for Shipping, Trade and Finance combined with the 9th City of London Biennial Meeting, 6-8th November, at the IMO HQ’s in London. Another timely event given what takes place in the Markets with uncertainty, the Trade Wars mess, the funding of ships and obviously the Environment with the 2020 beginning in 60 (sixty) days from now but the result will be disapointing as the number of ships “complying” is NOT what the regulators expected
Ensure you ink your diary for the 25th Anniversary of the London Shipping Law Centre at London’s Savoy Hotel on the 27th of November. For more info and registration please click here .-
Have a nice evening and remain on guard from actions emanating from Pirates, Terrorists, Criminals and Business Hooligans whatsoever wherever you are on Planet Ocean… AND have a great weekend!
P.S.: Get ready from now on for the HESGB 25th Anniversary at the Grosvenor House:
