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Weekly Market Report

Week 27/2019 (01 July – 05 July)

Comment: China’s LNG imports

index

comment page 2

chartering

dry cargo “ 3

tankers “ 6

containers “ 8

sale & purchase

newbuildings / finance “ 9

secondhand / demolition “ 10

commodities

news “ 11

prices “ 13

banchero costa network chartering - sale&purchase - ship finance - insurance - agency - research - and more...

Australia52%

Qatar16%

Malaysia12%

Indonesia5%

PNG5%

Nigeria4%

Russia2%

USA1%

Other3%

China - Sources of LNG Imports in Jan-May 2019(source: customs data; in million tonnes)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

mil

lio

n t

on

ne

s

China - Monthly LNG Imports - Seasonality(Jun 2019 ; source: GAC ; in million tonnes)

2015 2016 2017 2018 2019

comment

2 market report - week 27/2019

In 2018, China’s imports of LNG soared 40.4 percent year-on-year to a record 53.8 mln tonnes, according to figures from the General Administration of Customs.

China retained its position as the world’s second largest importer of the commodity after Japan, having overtaken South Korea in 2017.

This year, things slowed down a notch but growth remained impressive, with imports in the first 5 months of 2019 up 20.4 percent year-on-year to 23.9 mln tonnes.

The jump last year was driven by a major government push for households to shift from coal to gas for heating. This year however, the focus of the domestic anti-air pollution campaign has changed to clean coal rather than coal-to-gas switching, according to local analysts.

Temperatures this winter have been higher than usual, and there have also been some backlogs at receiving terminals.

Still, China is on track to overtake Japan this year as the world’s top importer of LNG.

The market is very much dominated by Asia, which accounts for 75 percent of global LNG imports. The three countries of China, Japan and South Korea by themselves account for 55 percent of global LNG imports.

In terms of supply, the big winner at the moment is Australia.

In the first 5 months of 2019, Australia accounted for 52 percent of China’s total LNG imports.

This is a significant increase from the 45 percent share Australia had in the same period last year, thanks to a 37 percent jump in volumes between the two countries on a year-on-year basis.

Australia is benefitting from a number of new liquefaction projects that are being commissioned.

With more projects coming on stream, such as Shell’s Prelude facility in the northwest of the country, Australia is on track to soon overtake Qatar as the largest exporter of LNG.

Qatar on the other hand saw it’s share of the Chinese market shrink to just 16 percent in the first 5 months of 2019, from 20 percent in the same period last year. In terms of absolute volumes, there was a 5 percent decline year-on-year.

The trade war clearly had an impact on US exports of natural gas. Volumes of LNG from the US to China fell by 86 percent year-on-year. So far this year, the US had just a 1 percent share of the Chinese LNG market, down from 9 percent last year.

Aside from Australia, another producer which is benefiting from this realignment in trade is Papua New Guinea, which almost doubled both its volumes and its market share in China - from 3 percent to 6 percent.

Other countries increasing both volumes to China and their share of the Chinese market are Malaysia – from 10 percent to 12 percent – and Indonesia – from 5 percent to 6 percent.

China’s LNG imports

Unit 05-Jul 28-Jun W-o-W Y-o-Y

BPI TC Avg. usd/day 13,295 10,301 +29.1% +23.6%

BPI 82 TC Avg. usd/day 14,683 11,825 +24.2% +22.0%

P1 Transatlantic r/v usd/day 16,130 10,460 +54.2% +60.4%

P2 Skaw-Gib Trip East usd/day 22,609 18,180 +24.4% +25.2%

P3 Pacific r/v usd/day 11,092 9,660 +14.8% +13.1%

1 Yr TC Period Panamax usd/day 11,750 11,000 +6.8% -6.0%

1 Yr TC Period Kamsarmax usd/day 13,500 12,500 +8.0% -3.6%


BCI TC Avg. usd/day 26,444 19,360 +36.6% +10.0%

C8 Transatlantic r/v usd/day 28,600 20,525 +39.3% -2.9%

C14 China-Brazil r/v usd/day 23,341 18,505 +26.1% +4.5%

C10 Pacific r/v usd/day 23,375 16,363 +42.9% +18.6%

1 Year TC Period usd/day 17,500 17,000 +2.9% -12.5%

dry cargo chartering

Last week Capesize market had the strongest rise since in latest 6 months, with the average of 5 tc going up a lot and closing on Friday at $26,500/d, mainly driven by the Atlantic (especially trip to East), as It happened two weeks ago. The standard routes from Tubarao (C3) and West Australia (C5) to Qingdao were following the same upwards trend. The standard Tubarao to Qingdao route gained in 5 days more than $3/mt, closing on Friday in the lows $22/mt, due to fresh enquiry mainly from Brazil. The West Australia/Qingdao went up too, starting at mid $7/mt and averaging mid $9/mt at the end of the week. The strongest push came from the Atlantic: front haul reached, during the week, $55,000/d for a vessel open in Black sea and $50,000/d for a longer front haul. Transatlantic round cargoes had to pay very high numbers, nearly $30,000/d, while the Bolivar to Rotterdam settled at $12/mt; the Saldanha Bay to Qingdao also went up to $16/mt. Period activity was rather thin: trading range for standard Baltic type vessels was in the low $20’s/d for a short duration period.

Capesize Market

Rates

Panamax Market

Rates

The Atlantic market was still pushing rates on the high side due to lack of tonnage with increased levels seen on Kamsarmax achieving around $16.75k/d + $675k bb for trips basis aps to Feast, while similar size were achieving levels around $14.75k/d basis Lumut dely for trips via ECSAm to FEast. A 75k dwt was reported fixed at $13k/d basis retro Krishnapatnam for trip via ECSAm to FEast. For trip basis ECSAm dely to Skaw-Passero a 95k dwt was reported fixed at $18k/d and similar levels were also seen on a Kamsarmax. Kamsar trips to San Ciprian were fixed at $16k/f bss Jorf lasfar dely on a 78k dwt, while basis Gib dely an 82k dwt fixed trip via ECSAm to Skaw-Gib at $15.75k/d. For 2 LL basis Gib dely also a 78k dwt was reported fixed at $14.6k/d redely Skaw-Gib. For trips via USG basis aps dely, an 81k dwt was reported done at $17k/d + $700k bb, while basis USG loading an 81k dwt was reported fixed basis Shanghai dely at $13k/d for redely FEast. In Cont, a 76k dwt was reported for trip via Murmansk to Jorf Lasfar at $22k/d, while trips to India were fixed on similar size vessel at $26k/d basis UK dely for trip via Rouen to WCI. A 75k dwt was fixed at $21.5k/d for trip basis dely Wilhelmshaven via Baltic to China at $21.5k/d. Basis BlSea loading a 76k dwt was fixed basis Jebel Ali for trip Spore/Japan at $15.25k/d. In FEast good levels were seen also with Kamsarmax achieving $13k/d bss Japan dely for round trips via Australia. A 93k dwt was reported fixed basis Taiwan for quick trip via Indo to SChina at $12k/d bss dop, while NOPAC rounds were also seen in the high $12k/d on Kamsarmax basis Japan/Korea dely. On the period front, an 81k dwt was reported fixed at $13k/d for 4/6 months basis dely Mach.

3

0

7,000

14,000

21,000

28,000

35,000

5/7/18 5/11/18 5/3/19 5/7/19

BCI TC and Capesize 1-YR Period (usd/day)

1-YR TC BCI TC

0

4,000

8,000

12,000

16,000

20,000

5/7/18 5/11/18 5/3/19 5/7/19

BPI TC and Panamax 1-YR Period (usd/day)

1-YR TC BPI TC

market report - week 27/2019


Supramax kept previous week levels with fixtures at $15k/d to Atlantic and $20k-low 20k's/d direction East. We recorded a still short tonnage list and a good number of cargoes, even if several ones got fixed. Ultramax rates reached a super $20k/d for grains to Med while owners asking with less shyness mid-high $20,000’s/d for grain cargoes to East. Handysize also kept the same good trend of previous week. Rates were in the $12-13k’s/d for USG to Med for 32-35k dwt and in the mid-high teens for larger 37-39k dwt. Market was still positive in ECSAm thanks to the lack of tonnage and the grain season that allowed offers to peak up in the area. Handies’ rates improved to $14.5k/d for the trip to Cont/Med and $17k/d for trip FEast, while a coastal within Brazil was paid $12.5k/d. Market was more stable even if bullish for Supramax, with fixtures heard at $16-16.5k/d for trip to Cont/Med and $13.75k/d +$375k bb, close to last week level. Ultramax market was also strong, seeing $17k/d for trip to Skaw-Passero and $14k/d+$400k bb or tick more for trip FEast.

Supramax & Handysize Market

Ind

ia

S A

fric

a

Cont market was firm on Handies and Supramax last week, but a bit less active than other areas of the Atlantic basin. There were rumors that a geared and modern 55k dwt was fixed on voyage basis for a coke cargo from Poland to WCMexico in the region of $15-16k/d as t/c equivalent. Only few fixtures were reported on Handies including two vessels – a 28k dwt and 37k dwt - fixing the same trip basis dely Cont redely EMed with scrap for duration of about 35 days at $7k/d and $9k/d respectively. BlSea market started to fire a bit as more grain enquiry hit. Supras/Ultras were buoyed by good levels for front hauls – an Ultra was reported this week at low $20k’s/d dop Egypt for TCT SEAsia – and Handies were starting to see double digits for grains runs in the Med with a lot of period activity. A 33k dwt was on subs at $9.7k/d dely Turkish Med for 4-6 months with charterers willing to pay $10k/d for larger vessels. Early in the week a 63k dwt open WCI was understood to be fixed at low $13k/d dop for trip via BlSea grains redely Spore/Japan range. As FEast was still not attractive for many owners, most of the ships open in MEG/WCI preferred to do biz within the area. A 57k dwt early in the week fixed dop Kandla for $11.75k/d dop with a capping of $40k for trip via MEG to India with limestones, while for a similar biz later in the week a 56k dwt was fixed at $11.5k/d dop Hazira with AP costs as per actuals. From MEG a 58k dwt was understood to be fixed at $13k/d dop levels for trip via UAE to ECI with $50k lumpsum cap. Though many ships didn’t prefer to go to FEast, some were reported to go at premium rates. The iron ore demand from India was still strong and feeding onto the ships open in ECI, thus keeping the market strong. Not much came to light from SAfrica during the week, except rumors of a 56k dwt getting low $12k/d + low $200k’s for trip via SAfr to MEG/India direction. Overall Indian Ocean remained pretty strong for another week.

Far

East

P

acif

ic

Even if the spot coal trade chartering from Indo to China kept the larger sizes quite busy, daily t/c rates lost a few hundred dollars throughout the week. A Tess52 delivered at Vietnam was fixed at $8.75k/d dely Vietnam, while afterwards a same type of vessel got $6.1k/d from CJK to full range China. With the same dely (CJK), one Dolphin57 got $6k/d and afterwards another one agreed $5k/d. Nickel ore trade from Philippines to China reported a 48k dwt done at $6.75k/d dely CJK and with the same dely a Tess58 was fixed on subs at $7k/d. A quieter interAsia trading showed a Dolphin 55.6k dwt taken from SChina to Vietnam at $6.6k/d. A 56.6k dwt Dolphin delivered at SKorea was fixed for a back haul to Cont/Med at $3.5k/d for the 1st 65 days and $8.75k/d thereafter, while for similar trip a 53k dwt delivered at NChina got $3.5k/d and $9.35k/d with redely Med. With the usual smaller impact also Handies rates lost a bit of money last week: a 2018 built 38k dwt delivering at Malaysia received $8.75k/d for a short trip to Philippines and 33k dwt got fixed at $5k/d from NChina to SEAsia.

US

Atl

anti

c

Sou

th A

mer

ica

4

0

4,000

8,000

12,000

16,000

5/7/18 5/11/18 5/3/19 5/7/19

BSI TC and Supramax 1-YR Period (usd/day)

1-YR TC BSI TC

0

3,000

6,000

9,000

12,000

5/7/18 5/11/18 5/3/19 5/7/19

BHSI TC and Handysize 1-YR Period (usd/day)

1-YR TC BHSI TC



BSI TC Avg. usd/day 9,435 9,014 +4.7% -13.7%

S4A 58 USG-Skaw/Pass usd/day 15,719 14,144 +11.1% +2.8%

S9 58 WAF-ECSA-Med usd/day 9,746 9,350 +4.2% +5.3%

S1B 58 Canakkale-FEast usd/day 19,771 18,293 +8.1% +30.8%

S11 58 Pacific r/v usd/day 7,706 7,769 -0.8% -25.7%


BHSI TC Avg. usd/day 6,595 6,523 +1.1% -20.2%


Sup

ram

axH

and

y

Rates

N E

uro

pe

M

ed

ite

rran

ean

Unit 05-Jul 28-Jun W-o-WPremium/

Discount

Jul (19) usd/day 23,625 18,317 +29.0% -10.7%

Aug (19) usd/day 20,363 17,996 +13.2% -23.0%

Sep (19) usd/day 20,021 18,079 +10.7% -24.3%

Q4 (19) usd/day 20,371 19,088 +6.7% -23.0%

Q1 (20) usd/day 13,758 13,213 +4.1% -48.0%

Q2 (20) usd/day 14,396 13,983 +3.0% -45.6%

Cal 20 usd/day 15,761 15,106 +4.3% -40.4%

Cal 21 usd/day 13,713 13,433 +2.1% -48.1%

Cal 22 usd/day 13,633 13,371 +2.0% -48.4%

Jul (19) usd/day 13,408 10,867 +23.4% +0.8%

Aug (19) usd/day 12,592 11,063 +13.8% -5.3%

Sep (19) usd/day 12,200 11,021 +10.7% -8.2%

Q4 (19) usd/day 11,817 10,958 +7.8% -11.1%

Q1 (20) usd/day 9,442 9,033 +4.5% -29.0%

Q2 (20) usd/day 10,158 9,842 +3.2% -23.6%

Cal 20 usd/day 9,769 9,393 +4.0% -26.5%

Cal 21 usd/day 8,963 8,798 +1.9% -32.6%

Cal 22 usd/day 8,554 8,342 +2.5% -35.7%

Jul (19) usd/day 10,067 9,829 +2.4% +6.7%

Aug (19) usd/day 11,071 10,550 +4.9% +17.3%

Sep (19) usd/day 11,142 10,767 +3.5% +18.1%

Q4 (19) usd/day 10,813 10,471 +3.3% +14.6%

Q1 (20) usd/day 9,008 8,754 +2.9% -4.5%

Q2 (20) usd/day 10,013 9,871 +1.4% +6.1%

Cal 20 usd/day 9,896 9,713 +1.9% +4.9%

Cal 21 usd/day 9,354 9,258 +1.0% -0.9%

Cal 22 usd/day 8,800 8,725 +0.9% -6.7%

Jul (19) usd/day 7,050 7,100 -0.7% +6.9%

Aug (19) usd/day 7,663 7,463 +2.7% +16.2%

Sep (19) usd/day 7,894 7,819 +1.0% +19.7%

Q4 (19) usd/day 8,181 8,288 -1.3% +24.0%

Q1 (20) usd/day 7,300 7,400 -1.4% +10.7%

Q2 (20) usd/day 8,213 8,250 -0.4% +24.5%

Cal 20 usd/day 8,056 8,144 -1.1% +22.2%

Cal 21 usd/day 7,881 7,981 -1.3% +19.5%

Cal 22 usd/day 7,813 7,938 -1.6% +18.5%

Han

dys

ize

Cap

esi

zeP

anam

axSu

pra

max

0

3,000

6,000

9,000

12,000

Jul-18 Jul-19 Jul-20 Jul-21

Handysize Forward Curve (usd/day)

0

4,000

8,000

12,000

16,000


Supramax Forward Curve (usd/day)

0

8,000

16,000

24,000

32,000


Capesize Forward Curve (usd/day)


Dry Bulk FFAs (Baltic Forward Assessments)

5

0

4,000

8,000

12,000

16,000


Panamax Forward Curve (usd/day)



TD1 MEG-USG ws 19.91 21.55 -7.6% +2.1%

TD1 MEG-USG usd/day -9,101 -6,244 -45.8% +42.6%

TD2 MEG-Spore ws 48.13 50.50 -4.7% -4.2%

TD3C MEG-China ws 47.58 49.79 -4.4% -3.9%

TD3C MEG-China usd/day 18,772 21,875 -14.2% +80.1%

TD15 WAF-China ws 47.08 48.17 -2.3% -5.6%

Avg. VLCC TCE usd/day 4,836 7,816 -38.1% +277.7%

1 Year TC Period usd/day 34,750 34,750 +0.0% +73.8%

TD6 BSea-Med ws 80.64 79.50 +1.4% -5.8%

TD6 BSea-Med usd/day 14,697 13,357 +10.0% +50.8%

TD20 WAF-Cont ws 61.48 71.55 -14.1% -13.3%

MEG-EAST ws 72.50 75.00 -3.3% +0.7%

TD23 MEG-Med ws 37.58 40.17 -6.4% +10.5%

Avg. Suezmax TCE usd/day 12,934 14,720 -12.1% +49.5%


TD7 NSea-Cont ws 90.83 87.50 +3.8% -14.0%

TD7 NSea-Cont usd/day 6,690 3,153 +112.2% +23.1%

TD17 Baltic-UKC ws 64.44 62.50 +3.1% -21.6%

TD17 Baltic-UKC usd/day 6,963 2,808 +148.0% -19.4%

TD19 Med-Med ws 90.28 107.22 -15.8% +10.9%

TD19 Med-Med usd/day 9,167 15,924 -42% +721.1%

TD8 Kuwait-China ws 116.11 118.17 -1.7% +15.7%

TD8 Kuwait-China usd/day 13,842 15,555 -11.0% +358.6%

TD9 Caribs-USG ws 67.81 80.00 -15.2% -39.7%

TD9 Caribs-USG usd/day -1,166 2,582 -145.2% -121.2%

Avg. Aframax TCE usd/day 7,986 8,946 -10.7% +72.9%


VLC

CSu

ezm

axA

fram

ax

tanker chartering

VLCCs’ rates kept on slowly softening throughout the week. Hound Point/Korea mid-July reported fixed by Trafigura at $4.8 mln. Meanwhile Suezmax West African market (and Suezmax in general) eased for most of the week, with 130,000 mt West Africa/UKC-Med down to WS60 level. Black Sea market was busier and rates remained steady around WS80 for 135,000 mt to Med. East of Suez, Repsol put 140,000 mt Basrah/Europe on subs at Ws37.5, taking east options on the ship too. Aframax rates in Med were under pressure and went down to WS90 for 80,000 mt ex Ceyhan. North Sea and Baltic market were slightly firmer, with 100,000 mt ex Baltic covered at WS65 to UKC and WS60 to Med. Fixing week has been short in the US, but long enough to see rates falling down to WS65 for 70,000 mt ex USG to Med-UKC.

Crude Oil Tanker Market

6

Rates


-10,000

5,000

20,000

35,000

50,000

65,000

5/7/18 5/11/18 5/3/19 5/7/19

VLCC MEG-Far East (usd/day)

-5,0005,000

15,00025,00035,00045,00055,00065,00075,000

5/7/18 5/11/18 5/3/19 5/7/19

TD6 Suexmax BSea-Med (usd/day)

-15,000-5,0005,000

15,00025,00035,00045,00055,000

5/7/18 5/11/18 5/3/19 5/7/19

TD19 Aframax Med-Med (usd/day)

10,00015,00020,00025,00030,00035,00040,00045,000

Jul-18 Oct-18 Jan-19 Apr-19 Jul-19

1 YR TC Period (usd/day)

VLCC Suezmax Aframax

10,00012,00014,00016,00018,00020,00022,00024,000

Jul-18 Oct-18 Jan-19 Apr-19 Jul-19

1 YR TC Period (usd/day)

LR2 MR2

0

5,000

10,000

15,000

20,000

25,000

5/7/18 5/11/18 5/3/19 5/7/19

MR Pacific Basket (usd/day)

05,000

10,00015,00020,00025,00030,00035,000

5/7/18 5/11/18 5/3/19 5/7/19

MR Atlantic Basket (usd/day)

05,000

10,00015,00020,00025,00030,00035,000

5/7/18 5/11/18 5/3/19 5/7/19

TC1 LR2 MEG-Japan (usd/day)

tanker chartering

Product Tanker Market

Delays at Turkish Straits for Daylight Restricted Vessels

East of Suez LR2 rates weakened last week, closing at WS 90 for MEG/Japan voyages basis 75,000 mt, like MEG/UKC rates, which dropped at $2.0 mln. It was a negative week also for LR1 discharging East, whose rates further decreased at WS95. West of Suez, LR2 and LR1 trading UKC/Japan kept losing ground by moving down at $1.7 mln and $1.55 mln respectively. In Med, rates for clean Handysize vessels for CrossMed trades saw a great improvement by quickly moving up to WS165 and WS200 for Black Sea/Med voyages, mainly due to Turkish straits up to 5 days northbound. In Cont, clean Handies involved in Baltic/UKC voyages remained overall steady at WS135, with CrossCont following 10 points below. Clean MR rates from Cont to US destinations experienced a “quiet” week with rates setting at WS140. Back hauls on TC14 route backed up at WS95. The Dirty petroleum products market in Med saw again a long position list of Handysize vessels that, despite the long delays at the Turkish Straits, didn’t prevent rates from Med and Black Sea to soften. Therefore CrossMed trades lost a few points down to WS125 and rates from Black Sea touched WS140. Charterers were quiet in Cont, and rates for 30,000 mt CrossCont remained stable/soft at WS137.5/140 level. Dirty Panamaxes lost a couple of points down to WS92.5 basis 55,000 mt on UKC/Med-TA routes.



TC1 MEG-Japan ( 7 5 k ) ws 89.29 98.06 -8.9% -8.7%

TC1 MEG-Japan ( 7 5 k ) usd/day 8,434 11,651 -27.6% +45.9%

TC8 MEG-UKC ( 6 5 k ) usd/mt 25.02 26.86 -6.9% -3.5%

TC5 MEG-Japan ( 5 5 k ) ws 94.00 110.56 -15.0% -21.7%

TC5 MEG-Japan ( 5 5 k ) usd/day 6,517 10,552 -38.2% -12.8%

TC2 Cont-USAC ( 3 7 k ) ws 140.28 137.78 +1.8% +29.2%

TC2 Cont-USAC ( 3 7 k ) usd/day 11,560 10,816 +6.9% +650.6%

TC14 USG-Cont ( 3 8 k ) ws 98.57 104.64 -5.8% +10.3%

TC14 USG-Cont ( 3 8 k ) usd/day 3,900 5,427 -28.1% +473.2%

TC9 Baltic-UKC ( 2 2 k ) ws 135.00 135.00 +0.0% +3.8%

TC6 Med-Med ( 3 0 k ) ws 166.56 136.13 +22.4% +28.0%

TC7 Spore-ECAu ( 3 0 k ) ws 159.33 160.72 -0.9% -7.7%

TC7 Spore-ECAu ( 3 0 k ) usd/day 11,627 12,232 -4.9% +25.1%

TC11 SK-Spore ( 4 0 k ) usd/mt 11.46 11.91 -3.8% +40.8%

MR Pacific Basket usd/day 9,576 11,317 -15.4% +81.3%

MR Atlantic Basket usd/day 15,158 16,123 -6.0% +182.1%

LR2 1 Year TC Period usd/day 21,000 21,000 +0.0% +47.4%

MR2 1 Year TC Period usd/day 15,000 15,000 +0.0% +3.4%

TD12 Cont-USG ( 5 5 k ) ws 92.81 95.00 -2.3% -6.4%

TD18 Baltic-UKC ( 3 0 K) ws 142.42 145.42 -2.1% -7.6%

BSea-Med ( 3 0 k ) ws 140.0 140.0 +0.0% +0.0%

Med-Med ( 3 0 k ) ws 125.0 130.0 -3.8% -3.8%

Cle

anD

irty

Rates


Northbound days 3.0 2.5 +20.0% +100.0%

Southbound days 3.0 2.5 +20.0% +100.0%

600

700

800

900

1,000

5/7/18 5/11/18 5/3/19 5/7/19

Shanghai Container Freight Index

5,000

7,000

9,000

11,000

13,000

4/7/18 4/11/18 4/3/19 4/7/19

Geared - 1 YR TC Period (usd/day)

2500 1700 1100

6,000

8,000

10,000

12,000

14,000

4/7/18 4/11/18 4/3/19 4/7/19

Gearless - 1 YR TC Period (usd/day)

4250 3500 2700


ConTex index 399 399 +0.0% -25.3%

4250 teu (1Y, g’less) usd/day 9,558 9,290 +2.9% -27.3%

3500 teu (1Y, g’less) usd/day 8,956 8,984 -0.3% -28.8%

2700 teu (1Y, g’less) usd/day 9,070 9,027 +0.5% -25.9%

2500 teu (1Y, geared) usd/day 8,873 8,887 -0.2% -26.9%

1700 teu (1Y, geared) usd/day 8,367 8,353 +0.2% -21.8%

1100 teu (1Y, geared) usd/day 6,444 6,445 -0.0% -22.0%

The charter market didn’t change much compared to last weeks: while rates for smaller vessels decreased slightly, the Baby Panamaxes continued their positive trend. Meanwhile, mostly due to the global geopolitical tensions and the regionalization of manufacturing supply chains, Drewry has recently slowed the 2019 global port throughput growth to 3%.

containers

VHSS Containership Timecharter Assessment (source: Hamburg Shipbrokers’ Association)

Containership Market

Shanghai Containerized Freight Index (source: Shanghai Shipping Exchange)

8


Comprehensive Index index 811 830 -2.3% -0.8%

Services:

Shanghai - North Europe usd/teu 688 701 -1.9% -21.9%

Shanghai - Mediterranean usd/teu 705 726 -2.9% -21.9%

Shanghai - WC USA usd/feu 1,649 1,720 -4.1% +6.0%

Shanghai - EC USA usd/feu 2,764 2,789 -0.9% +5.4%

Shanghai - Dubai usd/teu 782 784 -0.3% +66.4%

Shanghai - Santos usd/teu 2,014 2,260 -10.9% +15.9%

Shanghai - Singapore usd/teu 134 138 -2.9% -11.8%


Recent Fixtures

Vessel Name Built TEUs TEU@14 Gear Fixture Period Rates

Kure 1996 7,403 5,827 no extended to Cosco 12 m $21,500/d

Miami 2008 5,085 3,350 no extended to Maersk 3/4 m $10,900/d

Songa Toscana 2013 4,957 3,762 no fixed to Ts Lines 5 m $15,500/d

Cordelia 2003 2,824 2,020 no fixed to Ts Lines 7/30 days $8,500/d

Cape Faro 2006 1,440 1,065 no fixed to Rizhao Haitong Ferry 1/3 m $7,600/d

Type Size Built Yard Buyers Price Comment

Crude 307,000 dwt 2021 Dalian Wah Kwong 85 each 2 units

Crude 113,000 dwt 2H 2021 Hyundai Neste 70 each 2 units

Bulk 42,000 dwt n.a. Tsuneishi Nissen Kaiun 25 each 10 units

100

105

110

115

120

5/7/18 5/11/18 5/3/19 5/7/19

Yen/USD Exchange

1.05

1.10

1.15

1.20

1.25

5/7/18 5/11/18 5/3/19 5/7/19

USD/Euro Exchange

20

25

30

35

40

45

50

Jul-17 Jan-18 Jul-18 Jan-19 Jul-19

Newbuilding Prices (usd mln)

Ultramax LR2 MR2

3 yrs 5 yrs 7 yrs 10 yrs 15 yrs 20 yrs

USD 1.82 1.81 1.87 1.98 2.11 2.18

Euro -0.37 -0.27 -0.13 0.10 0.40 0.56

Libor USD Libor Euro Euribor Euro

6 Months 2.21 -0.40 -0.34

12 Months 2.19 -0.32 -0.27

In the tanker market, Wah Kwong signed 2 x VLCC (around 307k dwt) at Dalian with delivery during 2021. Price reported to be around $85 mln each. CSIC Leasing will take part in the deal. In S.Korea, Sinokor moved for 2+2 (optional) LR2 at Samsung and Finnish company Neste signed at Hyundai 2 x 113,000 dwt ice class 1A Aframaxes for delivery in the second half of 2021. Vessels to be fitted with LNG dual fuel technology and price to be close to $70 mln each. Nisshin Kaiun signed 4 x stainless steel 33,000 dwt chemical tankers at Nantong Xiangyu shipyard. Deliveries to start from May 2022. In the dry market, Tsuneishi received an order from Nissen Kaiun for 10 Handysize 42k dwt each. Five each will be built at Zhoushan facility and the rest at Cebu facility. Price reported to be around $250 mln.

Newbuilding Market

Newbuilding Reported Orders

Indicative Newbuilding Prices (China)

sale & purchase

Interest Rates

Interest Rate Swaps

9

Unit 01-Jul-19 M-o-M Y-o-Y

Capesize usd mln 48.8 -0.2% +3.7%

Ultramax usd mln 26.0 -0.3% +0.9%

Supramax usd mln 23.1 -0.2% +1.2%

VLCC usd mln 83.9 -0.1% +2.2%

LR2 Coated usd mln 45.9 -1.2% +1.4%

MR2 Coated usd mln 33.4 -0.2% -0.5%

05-Jul 28-Jun W-o-W Y-o-Y

USD/Euro 1.13 1.14 -1.1% -3.8%

Yen/USD 108.5 107.9 +0.6% -2.0%

SK Won/USD 1,170 1,155 +1.4% +4.6%

Exchange Rates


TYPE VESSEL NAME DWT BLT YARD BUYERS PRICE NOTE

Bulk Louise Bulker 31,700 2010 Hakodate C.of Taylor 9.5-9.7

Bulk Emma Bulker 31,700 2010 Hakodate C.of Taylor 9.5-9.7

Bulk Gea 33,560 2005 Shin Kurushima Undisclosed 6.85

Bulk Allstars 28,520 2000 Imabari Chinese buyers 4.5

Bulk King Canola 28,000 2013 Imabari C.of Newport 8.4

Crude Seaheritage 110,000 2005 Hudong Undisclosed 14.1

Prod Krisjanis Valdemars 37,000 2007 Hyundai Mipo German buyers 11.25

Prod Coral Stars 37,000 2004 Shina Undisclosed 8.4 shallow draft. Trading DPP

350

400

450

500

5/7/18 5/11/18 5/3/19 5/7/19

SubCon Demo Assessment (usd/ldt)

Dirty Tnk Clean Tnk Dry Bulk

15

20

25

30

35

40

5/7/18 5/11/18 5/3/19 5/7/19

Secondhand Values (usd mln)

Kamsarmax Aframax MR


Dry Bulk usd/ldt 407.8 407.8 +0.0% -6.0%

Dirty Tanker usd/ldt 415.5 415.5 +0.0% -5.8%

Clean Tanker usd/ldt 413.6 413.6 +0.0% -6.5%

sale & purchase

Secondhand Market

Baltic Secondhand Assessments

Baltic Ship Recycling Assessment (Subcontinent)

10


Capesize usd mln 35.3 35.2 +0.4% +0.4%

Kamsarmax usd mln 23.4 23.3 +0.1% +6.5%

Supramax usd mln 17.4 17.4 -0.1% -5.7%

VLCC usd mln 69.1 68.9 +0.3% +12.2%

Aframax usd mln 35.6 35.4 +0.6% +19.2%

MR Product usd mln 28.3 28.1 +0.5% +9.0%


Last week saw an increasingly interest in Handy bulkers and several transactions materializing. Starting from modern tonnage the “KING CANOLA” 28k dwt 2013 built Imabari was sold from Japanese owners to Greek Newport SA for a price region $8.5 mln, evidence of the discount of the smaller dwt compared to other 2 sales of 2 x 32k dwt 2010 built Hakodate, sister ships, sold by Lauritzen to clients of Taylor Maritime. The ships are the “EMMA BULKER” & “LOUISE BULKER”, price of $9.5-9.7 mln each, enbloc deal. A 32k dwt Handy 2005 Shin Kurushima, the “GEA”, was sold to Greek based buyers for a price of $6.85 mln, which evidences a sensible discount to last sale of “IVS KAWANA” (the deal was likely fixed before the recent market uptrend). Otherwise other dry bulk sales saw the German controlled Dolphin57 “HAMMONA KORSIKA” 57k dwt 2010 built Hantong done at $10.5 mln and the insolvency “HERMANN-S” Dolphin57 2009 built Hantong for $9 mln to Singapore based buyers. On the tanker front, few VLCCs got sold: the “RIDGEBUTY EAGLE” around 309k dwt 2002 built Sansung at $28.5 mln and the “APOLLONIA” around 310k dwt 2003 built Samsung at region $31 mln to Singapore based Buyers. Two sales were concluded in the product tanker segment, the “CORAL STARS” 37k dwt 2004 built Shina (shallow draft and trading dirty) reported done at $8.4 mln and the Krisjanis Valdemars around 37k dwt 2007 built HMD (ice class 1b) for $11.25 mln to Chemikalien.

Secondhand Reported Sales

From June 2019, the Panamax BSPA benchmark changed into a Kamsarmax (82,500mt dwt on 14.43m, LOA 229m, beam 32.25m, 97,000cbm grain) and the benchmark BSPA Aframax specifications was amended to 115,000mt dwt and 44m beam

news

Dry Bulk Commodities

Congo army evicts illegal miners from Glencore project, sparks protests Congolese security forces evicted thousands of illegal miners from a copper and cobalt mine run by Glencore on Thursday, sparking angry protests outside the governor's office and looting of shops, local activists said. The move by the police and army came one week after a landslide at the Kamoto Copper Company (KCC) concession, majority-owned by a Glencore subsidiary, killed 43 people, prompting a government pledge to swiftly remove the miners. United States adds India to steel tariff dispute at WTO The United States has complained at the World Trade Organization about Indian tariffs imposed in response to U.S. steel and aluminium tariffs last year, a WTO filing showed on Thursday. The dispute follows similar complaints against China, the European Union and others who retaliated in the same way, saying the U.S. tariffs were essentially "safeguard" measures that should be accompanied with a balancing cut in trade barriers on other goods. The United States says they are not safeguards. Chinese steel producers’ profits decline 18 pct in Jan-May Chinese steel producers saw their profits fall 18.2 percent year on year in the first five months of 2019 as rising costs hurt earnings, an industry association official said in Shanghai. Qu Xiuli, vice chairman of the China Iron and Steel Association (CISA), said the combined profits of CISA’s member enterprises totaled 85.5 billion yuan (12.4 billion U.S. dollars) in the January-May period. Brazil's H1 2019 iron ore exports fall 10% on year Brazilian iron ore exports for the first six months of 2019 totaled 162.38 million mt, a 10% drop from the same period of 2018, the trade ministry said Thursday. But overall sales volume for the first half of the year rose 5% to $9.74 billion, as the average price rose $59.97/mt FOB from $51.30/mt in the same period a year ago. Shipments to China -- the main consuming market receiving 46% of total shipped -- slid 16% in the six-month period to 87.09 million mt while overall sales value dipped 3% to $4.89 billion. Chinese thermal coal demand to fall with launch of new power transmission line China’s thermal coal demand is likely to fall once the world’s longest ultra-high voltage transmission line is completed by the Asian country, market sources said Thursday. China has launched its 3,324-km long transmission line that connects the coal-rich Xinjiang province in western China to Anhui province in the country’s east, Xinhua News Agency, China’s official news agency, reported Tuesday. Once completed, the transmission line is expected to reduce Chinese coal usage by about 30 million mt/y, according to the report. United States makes first-ever rice sale to China -trade group A private importer in China last week bought U.S. rice for the first time ever, in the midst of a trade war between the two nations, a rice industry group said on Wednesday. The Chinese importer bought two containers, about 40 tonnes, of medium-grain rice from California-based Sun Valley Rice, said Michael Klein, a spokesman for USA Rice, a trade group that promotes the sale of the U.S. grain. Agritel forecasts Ukraine wheat crop to reach 28.8 mln T on record yield Ukrainian wheat production could jump by 16.9% to 28.8 million tonnes this year, with favourable growing weather expected to result in record yields, French crop consultancy Agritel said. Agritel's forecast, which followed a June 17-21 field tour in Ukraine, would also be almost 12% above the average production level of the past five years, it said on Friday. Russian wheat prices drop on new-crop arrival Russian wheat prices fell last week on the arrival of the new crop and despite continuing risks to the harvest from the June heatwave, analysts said on Monday. Black Sea new-crop prices for wheat with 12.5% protein content were $193 a tonne free on board (FOB) at the end of last week, down $2 from a week earlier, Russian agricultural consultancy IKAR said in a note. Russia’s 2019 grain harvesting started earlier than a year ago because of dry weather in several regions. As of July 5, farmers had harvested 19.3 million tonnes of grain with an average yield of 4.06 tonnes per hectare. Canada proposes meat export solution, pushes back on China's criticism Canada offered a plan to reassure China about the security of its meat export system, a Canadian minister said on Wednesday, as Ottawa rejected Chinese criticism of its efforts to enlist allies to resolve a diplomatic dispute between the countries. China said last week it wanted the Canadian government to stop allowing meat shipments to China after bogus export certificates were discovered, escalating a dispute that has also involved arrests in both countries of each other's citizens and a halt in Canadian canola sales to China. Source: Refinitiv / Argus Media / Platts

market report - week 27/2019 11

news

Oil & Gas

Iran calls UK seizure of tanker 'threatening‘ Iran has described the UK's detention of a tanker carrying Iranian crude off the cost of Gibraltar last week as "threatening" and "illegal", and has once again called on UK authorities to release the vessel. The Panamanian-flagged very large crude carrier (VLCC) Grace 1, which was fully laden with Iranian crude, was seized on 4 July as it headed into the Mediterranean after apparently taking the Cape of Good Hope route around Africa. The government of Gibraltar said the Grace 1's destination was the 140,000 b/d Banias refinery in Syria, and therefore the tanker was acting in breach of EU sanctions against Syria. Gibraltar port and police agencies boarded the vessel, accompanied by a detachment of the UK's Royal Marines armed forces. UK-flagged tanker reported 'safe and well' after stop in Gulf The UK-flagged supertanker Pacific Voyager that halted in the Gulf on Saturday is "safe and well," a British official told Reuters, after Iran dismissed reports its Revolutionary Guards had seized the vessel. A Revolutionary Guards commander on Friday had threatened to seize a British ship in retaliation for the capture by Royal Marines of Iranian supertanker Grace 1 in Gibraltar. Europe boosts gasoline exports to U.S. after PES refinery fire Gasoline exports from Europe to the U.S. East Coast rose sharply in early July after a fire at a major refinery in Philadelphia left a supply shortage in the densely populated region. Philadelphia Energy Solutions' (PES) 335,000 barrel-per-day (bpd) oil refining complex, the largest and oldest on the U.S. East Coast, is set to permanently shut down after it was hit by a devastating fire on June 21. Philadelphia refinery closing reverses two years of U.S. capacity gains The planned closing of an oil refinery in Philadelphia damaged by a massive fire last month will reverse nearly two years of capacity gains at U.S. refineries, according to a Reuters analysis of government data. Philadelphia Energy Solutions has said it will shut its 335,000 barrels per day (bpd) refinery this summer after a June 21 fire tore through a portion of the plant, destroying an alkylation unit. China refiners curb fuel output after massive new plants stoke glut China's fuel producers are making extended curbs to their output in the third quarter after supply from mammoth new refineries stoked an already-sizeable glut, potentially dragging on crude oil demand from the world's biggest importer of the commodity. Private refiner Hengli Petrochemical ramped up its 400,000-barrels per day (bpd) plant in northeast China to full capacity in May, while Zhejiang Petrochemical began trial runs around the same time at a similar-sized refinery on the east coast. Second Turkish drillship arrives off Cyprus coast, Nicosia protests A second Turkish ship planning to drill for oil and gas off Cyprus arrived off the Mediterranean island’s northeastern coast on Monday, triggering a strong protest from Nicosia of an infringement by Turkey of its sovereign rights. Last month, European Union leaders warned Turkey to end its gas drilling in waters around the island or face action from the bloc, after Greece and Cyprus pressed other EU states to speak out. Druzhba crude flow stopped to Germany Schwedt refinery The 208,000 b/d Schwedt refinery in northeast Germany has again stopped receiving Russian Urals crude through the Druzhba pipeline system because of excessive levels of organic chloride, according to plant shareholder Shell. Industry association MWV said production at the refinery is not affected because storage tanks are full and crude is being imported via the port of Rostock. German refineries first stopped crude imports through the Druzhba pipeline in April, when excessive organic chloride content had been noticed. The pipeline flows resumed in June and were supposed to reach full capacity in mid-July. Cleaning Polish pipeline system to take 6-8 months Cleaning the Polish pipeline and storage system of tainted Russian oil will take six to eight months, the chief executive of the pipeline operator told reporters on Sunday. Russia halted oil supplies through its Druzhba export pipeline in April after the discovery of excessive levels of organic chloride, which can damage refinery equipment. Supplies of clean oil to Poland partially resumed in June. Vandals cause Nigeria pipeline explosion Nigerian President Muhammadu Buhari has warned against "tampering with pipelines and sensitive installations" after at least three people were killed in an explosion on an oil product pipeline in the northern part of Lagos yesterday. State-owned NNPC said the explosion was caused by vandals attempting to siphon off product. Source: Refinitiv / Argus Media / Platts

market report - week 27/2019 12

300

400

500

600

5/7/18 5/11/18 5/3/19 5/7/19

Wheat and Corn Prices (usd/t)

Corn Wheat

3,000

3,500

4,000

4,500

5,000

5/7/18 5/11/18 5/3/19 5/7/19

Steel Prices in China (rmb/t)

Rebar Plate

40

60

80

100

120

5/7/18 5/11/18 5/3/19 5/7/19

Iron Ore and Coal Prices (usd/t)

Steam Coal Iron Ore

40

50

60

70

80

90

5/7/18 5/11/18 5/3/19 5/7/19

Brent and WTI Oil Prices (usd/bbl)

Brent WTI

200

400

600

800

5/7/18 5/11/18 5/3/19 5/7/19

Bunker Prices @ Singapore (usd/t)

IFO 380 IFO 180 MGO


Wheat usd/t 520.3 524.5 -0.8% +1.5%

Corn usd/t 441.5 422.3 +4.6% +27.1%

Soybeans usd/t 878.5 904.5 -2.9% +1.3%

Palm Oil usd/t 473.4 471.8 +0.3% -15.7%


Iron Ore (Platts) usd/t 117.1 112.9 +3.7% +85.9%

Iron Ore China @Tangshan rmb/t 911.0 877.0 +3.9% +92.6%

Rebar in China rmb/t 4,045 4,002 +1.1% +0.1%

Plate in China rmb/t 4,175 4,159 +0.4% -1.0%

HR Coil in China rmb/t 4,004 3,976 +0.7% -8.0%

CR Sheet in China rmb/t 4,325 4,290 +0.8% -7.8%


Steam @ Richards Bay usd/t 66.3 62.9 +5.3% -38.4%

Steam @ Newcastle usd/t 77.0 67.2 +14.7% -33.7%

Coking Coal Australia usd/t 186.0 191.0 -2.6% -1.3%


Crude Oil Brent usd/bbl 64.6 66.6 -3.0% -16.6%

Crude Oil WTI usd/bbl 57.8 60.1 -3.7% -21.6%

Crude Oil Dubai usd/bbl 62.2 64.6 -3.8% -16.3%

Natural Gas Henry Hub usd/mmbtu 2.43 2.32 +4.7% -14.7%

Gasoline Nymex usd/gal 1.93 1.94 -0.5% -9.0%

ICE Gasoil usd/t 576.8 595.0 -3.1% -13.7%

Naphtha Tokyo usd/t 514.9 512.5 +0.5% -22.0%

Jet-Kerosene Asia usd/bbl 76.8 79.0 -2.7% -13.5%


Rotterdam usd/t 387.0 392.0 -1.3% -12.7%

Gibraltar usd/t 415.0 421.0 -1.4% -11.1%

Singapore usd/t 440.0 429.0 +2.6% -6.7%

Rotterdam usd/t 419.5 423.5 -0.9% -11.8%

Gibraltar usd/t 433.5 446.0 -2.8% -12.0%

Singapore usd/t 470.0 454.0 +3.5% -4.0%

Rotterdam usd/t 567.0 582.0 -2.6% -12.2%

Gibraltar usd/t 612.0 622.0 -1.6% -12.1%

Singapore usd/t 587.5 602.0 -2.4% -12.4%

IFO

38

0IF

O 1

80

MG

O

commodities

Oil & Gas Prices

Coal Prices

Iron Ore and Steel Prices

Agricultural

Bunker Prices


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