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Home HRAirline Industry Brace for Shipping becomes – faster than anticipated, Shipping for the very very very few

Brace for Shipping becomes – faster than anticipated, Shipping for the very very very few

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John Faraclas

Brace for Shipping becomes – faster than anticipated, Shipping for the very very very few

Markets, Geopolitics coupled with the worse ever Recession and the Coronavirus anathema call for immediate changes and adaption to the real new “norm” as the real bubble of the economy will burst making a possible Yellowstone look like a kindergarten. John Faraclas’ weekly recap on the Markets and Geopolitics including the Coronavirus effect for the near future:

The BDI (Baltic Dry Index) close down 18 points at 617, which is also 48 points down below last Friday’s 24th of April 2020 mark when same stood at 665 points…

The Capes lost 75 points with the BCI now reading 820; the weekly loss a nasty 144 points down from 964 recorded last week (24/04)… The Capes of …”Good Hope” still very unpredictable and volatile…

The Panamaxes’ BPI modest losses might soon be offseted… Down seven points today at 704 and 43 from last week’s 747 – you cannot fly it though…

Supras’ BSI continue its minimal but steady rise; today those three points “epitomise” the hope… At 413 promises a steady breakeven to those without the burden of mortgages… The weekly gains of 25 points an encouraging sign given that last week (24/04) the BSI was below the 400-points at 388…

The Handies’ BHSI managed to clinch a point and at 239 could not be worse… The weekly loss though of eight points is more than worrying… (247 on 24/04)…

Box-ships struggle before some companies are sold at a piecemeal…

“Tsunami” for the Wets; the last published BDTI (Dirties) and BCTI (Cleans) stood at 1,105 and 1,687 points –  minus 131 and 225 points respectively since yesterday. The weekly losses stood at 445 for the Dirties and 483 points for the Cleans – down from 1,550 and 2,170 points respectively on 24/04… So long as both indices are above the 1,000-point mark, do not worry…

Uncertain future, as said midweek, for the Cruise ships and Yachts… affecting greatly the Airline industry, which begs for state support to survive… Greediness had its day… “Check-in” the daily news and see the demands of A1 carriers as well as those of Low-cost airlines… Admittance of their messy and desperate situation can be read in the daily news. Colossal demands…

Gains for the WTI – now at US$ 19.62, and for the week too given last week’s US$16.96 (24/04)… We are witnessing very enigmatic situations/ behaviours and wonder how companies digest these low levels. Many tell us that oil companies found their Nemesis…  Watch this space as we see a massive interest for the Alternatives Sources of Energy… It will be very interesting amid this Recession and Coronavirus mess to see hiccups in the energy “norm”…

We are pleased to see an ineresting view from VesselsValue and hope same helps you understand the situation:

Shipping demand predicted sharp decline and recovery in the stock markets

As we all know, March 2020 was a poor month for the stock markets. This was driven by a global sell off in equities due to the expected reduced economic activity from the effects of COVID-19. April 2020 was a great month, with the global markets pricing in a quick recovery.

Interestingly, daily trends in global cargo mile demand data, as observed through our Trade service, forecasted this sharp decline and the recovery in the stock markets. This can be seen in the charts below relating to daily updated Capesize and Post Panamax cargo mile demand (red line) to the S&P 500 (grey line).

 

For Capesizes, a bell weather of industrial activity, cargo miles started to decline sharply in mid January, about a month before the stock markets started to crash. Cargo miles started to recover early March, again about a month before the stock markets started reaching their inflection point and started their recent upwards trajectory. For Post Panamax Containerships, a good indicator for trade in consumer goods, the decline in demand came slightly later at the start of February but still preceded the stock market selloff in early March. The shape and speed of recovery was similar, starting in early March and foreshadowing the recovery in the stock markets in from the start of April.

Hindsight is a great thing, and these calls would have been very hard to make while watching the stock markets dive through March.

However, there was potentially a lot of money to be made by reading the tea leaves of shipping for those who know where to look and how.

We look forward to your comments on this VesselsValue article above.-

The Geopolitical front remains the same as per our midweek recap and still wonder why main news have completely disappeared from TV screens, even radio…

We remind you that the MIGRANTS issue continues; it is even worse and will get worse given the weather, the favourable weather during the summer months as well in the case of Turkey and its leader’s appetite to make things worse in the entire Central and East Med region… The European Union and then NATO is to blame…

Libya gets messy…

The Syrian massacre continues… All parties engaged luck diplomatic breakthrough…

The entire Middle East is about to go on fire

We remind you of the faulty line from Gib to Afghanistan and from the Caucuses down to the Horn of Africa: messier than before…

BREXIT as said in the past – particularly during the Coronavirus melee, will surprise many… Things should froze until the conditions become the new norm to continue the EXIT or else… The European Union should also stand to the circumstances… The European Union MUST get its act together, as if not, it will be dismantled and the collapse of the European Dream will end forever… We now have a unique opportunity for a stronger Europe, for a self-sustained Europe and each country should enhance its self-sustain capability in all fronts. It is time to make Europe the most powerful region on Planet Ocean; WE CAN and Europe deserves it!

Africa continues as in our mid-week recap and we must stress the rise of Piracy… as well as transparency there…

In the Far East, the main breaking news is that on Kim Jong-un; the North Korean leader appeared and cut the red ribbon in a fertiliser factory; shipping knows best…

China begins to feel for the first time the wrath of 6.5 billion people on the Coronavirus mess and despite the Chinese authorities excuses, one thing is for sure, no matter what has or is really happening now: China and is economy will never ever see the past figures of development. The Chinese still have a case to answer!

At the other side of the Pacific – for a change, the USA is trying to remain put, but as the November presidential elections are approaching, we might witness “developments”… Watch this space!

We are in a state of shock and we were more than fortunate to have Evridiki Livadas, a world acclaimed analyst, book writer and historian to offer us her views a few days ago…

Coronavirus victims and cases still remain more than an alarming situation and we need per mare per terra the mathematical and statistical model as well as precise projections’ model to ensure that the day after will be fine! We need to know how to tackle a possible resurge, where we really stand now. In our humble view, it is necessary to have a sample of all on Planet Ocean; only then, we will know how we will tackle the situation, as things might turn sour. We are pleased that in the UK tests are to the fore reaching now 100,000 per day. WHO and all governments must ensure testing devices are there available for all members of the public as well as equipment checking every single human and pets…  yes pets too and also as international travel might resume how same will develop. We are also pleased to read of some medicine to help people’s treatment, but we need WHO to authorise its use worldwide. As for the vaccine, let us hope that tests are successful… We see the race is on to break time barriers but, remember: Rome was NOT built in a day! Overall, we are still in unchartered waters… CAUTION and discipline here is a big MUST! Ah! MOREOVER, what about MASKS?  It has come to our attention that any Tom, Dick and Hurry can produce same; SHAME as there should be a guidance and approvals from governmental bodies and all must be checked thoroughly before issuance of the quality control certificate and then make it available to the public for usage! No excuses for exploiting us anymore!

On top of everything else, the sharp rising of unemployment due to Coronavirus is the biggest danger and Governments must contain the situation before we see despicable scenes… It will be the 90 centum against the ten centum.  Once again, we call for leaders; this is what is missing in today’s life. What is the secret of successful political and geopolitical management? Why one country does performs extraordinary well, while another, similar, sinks? The issue is simply: systemic! Let us wake up and urge our MPs to come down to their senses before they come down to their knees! Productivity through People; this is the message!

In such an environment and given the already bad state in the Shipping industry, Shipping becomes slowly slowly but steadily Shipping for the very very very few. Size does not matter, what matters is the ability to win over your competitors… We don’t give a s..t for overcapacity; this is a free economy and you have to learn and swim alone… If a Monster does not eats a Monster, will never become a Monster. Try to interpret this! Ah! How ready you are on AI (Artificial Intelligence) and Digitalisation? Can you function from home 24/7? I am saying this as we expect other factors to lock-us in again… Today’s decisions are tomorrow’s realities; never forget this! My view is reinforced primarily from the USA where some governors are opposing relaxation of the lockdown measures, despite the public in some states are going to demonstrate to open up the “economy”. Patience is a virtue. Having said that, we insist that all over Planet Ocean Electricity, Gas, Water Bills are frozen… to help the immediate public’s needs and an understanding for other bills which many cannot afford in these tough times.

By the way how’s the Shipping Industry progressing on the IMO2020 issue… We shouldn’t relax the Environmental issues…

Lastly, we hope the Press and Media as well as all those fabricating news as well as fake news to give-up as they will be the first to pay the damage… You dead well know what I mean…

Have a nice evening as well as weekend and let’s hope next year we can all enjoy the First of May!!!! We still urge you more than ever before to remain on guard from actions emanating from Pirates, Terrorists, Criminals and Business Hooligans whatsoever wherever you are on Planet Ocean. Planet Ocean is changing; it is another day, WAKE UP!

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