Wednesday, 11 April 2012
Ship owners are anchoring the most commodity carriers since at least 2008 after the biggest slump in rates for more than a decade, cutting capacity just as Brazilian farmers prepare for record soybean exports.
More than 25 percent of the Panamax fleet was anchored last month, the most in data compiled by Bloomberg since 2008.
Daily rates for the 750-foot-long vessels will average $10,000 this quarter, 25 percent more than in the first three months and the biggest increase in more than two years, the median of nine analyst estimates shows.
Shares of Athens-based Safe Bulkers (SB) Inc., which owns 18 Panamaxes, will rise 35 percent in 12 months, according to the average of seven predictions.
Rates have been below the $13,000 owners need to break even every day this year, spurring more idling.
The slump reflects a glut of capacity rather than less trade, with Clarkson Plc, the biggest shipbroker, forecasting record volume in 2012.
Owners with fleets of 20 vessels or more may keep anchoring some ships to boost rates for those still competing for business, said Greg Lewis, an analyst at Credit Suisse Group AG.
"Can that strengthen rates? Absolutely," said the New York-based analyst, whose recommendations on the shares of shipping companies returned 18 percent in the past six months. "With the improvement in crop cargoes, we may see a pick up."
Maritime Routes
Rates slumped 37 percent to $8,277 since Jan. 1, the worst start to a year since at least 2000, according to data from the London-based Baltic Exchange, which publishes freight costs along more than 50 maritime routes.
They averaged $7,983 in the first quarter, the lowest since the final three months of 2008, when economies where going through the worst global recession since World War II.
The predicted 25 percent gain would be the biggest quarter-on- quarter advance since the end of 2009.
Returns for owners slumped because they ordered too many ships in 2007 and 2008, when rates reached a record $94,977.
The fleet expanded 46 percent since the end of 2007 and outstanding orders at ship yards are still equal to 36 percent of existing capacity, data from Redhill, England-based IHS Fairplay show.
As little as 19 percent of the fleet was anchored in August and last year's average was 22 percent, data compiled by Bloomberg show.
While that includes vessels waiting to load or discharge cargoes, the increase indicates more are being idled by owners or can't find charters.
Fund Management
Brazilian soybean exports will jump 23 percent to 36.9 million metric tons in the 12 months ending in September, more than compensating for a 3.4 percent decline in Argentine shipments to 8.9 million tons, the U.S. Department of Agriculture estimates.
The extra 7 million tons from Brazil, the largest soy shipper, is enough to fill about 100 Panamaxes.
The greatest influence on Panamax rates in the second quarter is South American crop cargoes, said Philippe van den Abeele, the managing director of Castalia Fund Management (U.K.) Ltd., a London-based adviser to a hedge fund trading shipping derivatives.
A surge in South American demand may spur vessels to haul anchor and compete for cargoes, driving rates lower.
Laid end- to-end, the fleet of anchored Panamaxes would stretch for about 108 kilometers (67 miles).
Owners may also speed up vessels so they can pick up more cargoes, reversing a three-year trend.
The average Panamax sailed at 8.6 knots last month, from 11.3 knots in May 2009, data compiled by Bloomberg show.
Agricultural Service
Drought damaged crops across South America this season, potentially reducing the amount available for export.
Brazil's soybean crop will probably be 66 million tons, less than the official USDA estimate of 68.5 million tons, the agency's Foreign Agricultural Service said in a report March 30.
Growers had harvested 82 percent of the crop as of April 5, according to Celeres, a research company based in Uberlandia, Brazil.
Demand for the region's crops also may be weaker than expected after Chinese Premier Wen Jiabao cut the nation's growth target to 7.5 percent last month, the lowest since 2004.
The country consumes 28 percent of the world's soybeans, 22 percent of its corn and 17 percent of its wheat, USDA data show.
The agency cut its forecast for China's soybean imports by 0.9 percent to 55 million tons last month, still a record amount.
Safe Bulkers has the largest proportion of Panamaxes within its fleet of any of the 10 largest publicly traded companies operating the vessels, data from London-based Clarkson show.
It will report a 19 percent gain in profit this year to $106.6 million, the mean of five estimates compiled by Bloomberg show.
Pure Play
Shares of the company rose 6 percent to $6.35 in New York this year, as of 11:20 a.m. local time yesterday, and will reach $8.57 within 12 months, according to predictions compiled by Bloomberg.
The MSCI All-Country World Index of equities jumped 8.6 percent and Treasuries lost 1.1 percent, a Bank of America Corp. index shows.
That compares with a 13 percent advance in the 14-member Bloomberg Pure Play Dry Bulk Shipping Index and a 31 percent gain in the Bloomberg Tanker Index of six companies carrying crude and refined oil products.
Rates to haul crude from Saudi Arabia to Japan, the industry's benchmark route, rose more than threefold this year, data from Clarkson show.
Global seaborne trade in dry bulk commodities, which also includes coal and iron ore, will reach 3.814 billion tons this year, compared with 3.685 billion tons in 2011, Clarkson estimates.
About 90 percent of world trade goes by sea, the Round Table of International Shipping Associations estimates.
Transport Costs
The second-quarter Panamax rate predicted in the Bloomberg survey is 5.8 percent higher than the costs anticipated by forward freight agreements, traded by brokers and used to bet on future transport costs.
Contracts for the period are trading at $9,456, according to data from the Baltic Exchange.
"The market still has far too many ships, but maybe the glut won't be quite so awful for a while," said Erik Nikolai Stavseth, the analyst at Arctic Securities ASA in Oslo whose recommendations on the shares of shipping companies returned 26 percent in the past year.
"Owners are becoming increasingly resistant to these dire markets and we are moving into peak Latin American shipping season so demand is strengthening."
Source: Bloomberg
http://www.hellenicshippingnews.com/News.aspx?ElementId=5b9ed712-71ce-4e10-8b8a-2eb092915364
http://www.safebulkers.com/index.html
11/4 2012 07:08 fcras 0
55367 DS Norden (DNORD) drifter 27 Panamax bulkere
http://www.ds-norden.com/drycargo/fleetlist/
http://www.ds-norden.com/drycargo/fleetlist/
