BANCOSTA Weekly Market Report...$13,000/d + $300,000 gbb, more or less holding the levels of last...

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Weekly Market Report

Week 48/2018 (26 November – 30 November)

Comment: Chinese steel prices falling

index

comment page 2

chartering

dry cargo “ 3

tankers “ 6

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sale & purchase

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commodities

news “ 11

prices “ 13

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2 market report - week 48/2018

Chinese steel prices saw a dramatic fall of over 20 percent in November, narrowing margins for steel mills that had been enjoying profits over the past 1+ years. While prices have soared over 6 percent on Monday, the rally is largely expected to be temporary knee-jerk reaction to the trade ceasefire between China and the U.S. over the weekend.

Demand from the construction sector typically slows down during the winter months, and this has compounded with concerns of oversupply due to more lenient production curbs this winter. China has allowed cities to set their own steel production restrictions this year based on emission levels, unlike the blanket production cuts imposed across 28 key steel-producing cities in 2017.

There have also been worries that consumption in China may not recover strongly after the winter, as the economy comes under pressure from the trade war with the U.S. and lower consumer spending. Furthermore, the outlook for China’s property market appears bearish as the government maintains its home-purchase restrictions, with securities firm China International Capital Corporation (CICC) forecasting new home sales to slide by 10 percent in 2019. S&P Global Ratings also expects home prices to fall by as much as 5 percent next year, while GS-CIMB Securities predicts a 10 percent decline in prices and sales volumes.

Thus, an anticipation of further steel price declines is discouraging traders and steel mills from their usual activity of replenishing iron ore and steel inventories over the winter, ahead of the typical seasonal demand pick up in spring. This is in spite of both iron ore and steel inventories falling to their lowest this year.

As steel mills face shrinking margins, they have been reducing costs by returning to cheaper, low to mid-grade iron ore. This is in contrast to previous months when steel prices and margins were still bullish, which helped higher grade iron ores to gain popularity in China as the government clamped down on air pollution.

The changing trend could be bad news for longer haul shipments from Brazil and South Africa, which supply the high-grade iron ores with 65 percent iron content. On the other hand, a preference for low to mid-grade ores is expected to be a boon for Australian miners such as Fortescue Metals Group, which is set to ship its first cargo of 60.1-percent West Pilbara Fines to Chinese customers in December. Fortescue largely produces the lower grade ores with 58 percent iron content, while the vast majority of Australian ore is of 62 percent, such as those mined by Rio Tinto.

Chinese steel prices falling

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

11/2015 03/2016 07/2016 11/2016 03/2017 07/2017 11/2017 03/2018 07/2018 11/2018

RM

B/m

t

China - Steel Product Prices - last 36 months(source: indices from cisa, RMB/mt)

Wire Rod Rebar HR Sheet HR Coil CR Sheet Plate

55.0

60.0

65.0

70.0

75.0

80.0

85.0

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

mill

ion

to

nn

es

China - Monthly Crude Steel Output - Seasonality(source: worldsteel, NBS China ; in million tonnes)

2013 2014 2015 2016 2017 2018

50.0

60.0

70.0

80.0

90.0

100.0

110.0

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

mill

ion

to

nn

es

China - Monthly Iron Ore Imports - Seasonality(source: customs data ; in million tonnes)

2013 2014 2015 2016 2017 2018

527

176

3712 11 9

71

557

188

3816 22 10

65

573

191

3513 13 13

55

0

100

200

300

400

500

600

700

Australia Brazil South Africa Iran India Peru Others

mill

ion

to

nn

es

China - Iron Ore Imports by Source (source: customs data ; in million tonnes)

2016 (1-10) 2017 (1-10) 2018 (1-10)

Unit 30-Nov 23-Nov W-o-W Y-o-Y

BPI TC Avg. usd/day 11,694 10,996 +6.3% +1.8%

BPI 82 TC Avg. usd/day 12,682 12,055 +5.2% n.a.

P1 Transatlantic r/v usd/day 13,610 12,745 +6.8% +4.9%

P2 Skaw-Gib Trip East usd/day 20,025 19,112 +4.8% +10.9%

P3 Pacific r/v usd/day 9,169 8,307 +10.4% -10.2%

1 Yr TC Period Panamax usd/day 11,000 10,750 +2.3% +0.0%

1 Yr TC Period Kamsarmax usd/day 13,000 12,750 +2.0% +8.3%


BCI TC Avg. usd/day 13,816 10,853 +27.3% -48.0%

C8 Transatlantic r/v usd/day 13,750 11,450 +20.1% -53.7%

C14 China-Brazil r/v usd/day 13,455 10,568 +27.3% -41.2%

C10 Pacific r/v usd/day 15,396 10,896 +41.3% -44.0%

1 Year TC Period usd/day 16,500 16,750 -1.5% -2.9%

dry cargo chartering banchero costa

The capesize market started strong last week before recording a quick drop thereafter. In the Pacific area, rates on the standard route WC Australia/Qingdao jumped to the very highs $8/mt for mid-December dates (with t/c rates close to $20,000/d) and then quickly collapsed to the mids $7/mt for the same dates (equivalent to $14,000/15,000/d). The activity from Saldanha Bay was suddenly slowed down due to rail accident happened in S Africa but, before that, trades were concluded in the very lows $14/mt for dates in the second half of December. Out of Brazil, rates went up to $18/mt thanks to a sudden presence of a good number of cargoes and then dropped down to $15/mt for mid-December dates with only Vale in the market to take ships on the Tubarao/Qindgao route. Some Brazil/UKC businesses were concluded in the region of $8,50/8,25/mt bss Tubarao/Rotterdam. Lower levels of activity were recorded in the Atlantic basin and rates for Bolivar/Rotterdam remained in the region of $9/mt, TransAtlantic RV around $16,000/d while fronthaul were agreed in the region of $26,000/d. The period activity was almost absent, expect for few deals concluded on a index linked basis.

Capesize Market

Rates

Panamax Market

Rates

The Panamax market remained under pressure also last week. The Pacific area was still very uncertain and, even if some fresh inquiries were quoted especially on the Indo/India route, rates kept lousy levels. The North Atlantic market recorded a slightly better situation and rates reached interesting levels thanks to a supporting demand particularly from BSea on cargoes to F East and/or Cont. The South Atlantic market remained almost flat during the week and, despite a good number of vessels ballasting from East, rates didn’t lose ground.

3

0

7,000

14,000

21,000

28,000

35,000

30/11/17 31/3/18 31/7/18 30/11/18

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

30/11/17 31/3/18 31/7/18 30/11/18

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

1-YR TC BPI TC

market report - week 48/2018

dry cargo chartering banchero costa

The Handysize market remained steady in USG with rates for 30/35,000 dwt to Cont/Med or interUSG still around $16,000/17,000/d. Supramax were getting premiums especially from the USG where the good amount of cargoes is expected to absorb the oversupply of tonnage and attract ships from the quieter NCSAm and USEC areas. Supramax and Ultramax with petcoke to Cont/Med were fixing around $21,000/22,000 and $24,000/25,000/d respectively while grains cargoes were fixed at a few thousand dollars less. Otherwise, the TCTs to East were still paying a premium of around $4,000/5,000/d. The ECSAm market recorded a soft decrease last week. Supramaxes fixed for trip to Cont/Med dropped to around $17,500/d while Ultramaxes were seeing numbers in the region of $18,000/d. Rates for Supramax on trips to Singapore/Japan remained at $14,500/d + $450,000 bb level while the Ultramaxes were fixing slightly below $15,000/d + $500,000 bb. The Handysize market bss 38,000 dwt was stable with rates around $15,500/16,000/d for trip to Cont/Med and $19,500/20,000/d. Rates for coastal trips in Brazil were in the region of $15,000/d.

Supramax & Handysize Market

Ind

ia

S A

fric

a

The Supramax route from Cont to E Med with scrap was worth around $10,500/11,000/d bss dely UKC redely E Med, with dely bss ARA range paying a premium. Rates for Supramax on fronthaul trips remained stable at around $16,000/d for long duration cargoes to the F East. The Handysize market confirmed its negative trend and rates to USG, due to the strengthening of the USG market, fell to around $8,000/d for a modern 35,000 dwt. Otherwise, rates to E Med were stable at around $10,500/d as recorded for a 35,000 dwt bss dely ARA range redely E Med with scrap. The Handysize market in the BlSea was essentially flat as demand levels softened and the available tonnage list increased. The inter-Med businesses were paying in the region of $13,000/d from Canakkale and around $10,000/d for trip back to the Gulf. Even if Supramaxes’ rates were affected by the declining Panamax market, some owners were still trying strong rates for fronthaul trips and some fixtures in fact were recorded around $23,000/d for trip with clean cargoes to F East.

A 56,000 dwt was reported fixed aps UAE port around $13,000/d levels for trip to WC India while a similar size ship was fixed for similar run bss dlosp WC India at $8,500/d levels. In the same region, another 56,000 dwt agreed $13,000/d dop WC India levels for trip via UAE to EC India with minerals bulk. A 61,000 dwt was fixed for a trip via UAE to WC India at $13,500/d with option of redely the ship in EC India at $15,500/d, showing clearly the disparity between the two coasts of India. While most of the ships which were open in EC India decided to ballast to S Africa or Singapore, only few were getting fixed with EC India dely like a Dolphin57 which agreed $9,000/d for a coastal run. Another Dolphin57 open EC India was understood to be fixed aps Richards Bay at $11,900/d + $190,000 gbb for trip to MEG-WC India range with coal. Rates were still better on the longer runs from S Africa to F East, as a 63,000 dwt was heard to be fixed at $13,000/d + $300,000 gbb, more or less holding the levels of last week.

Far

East

P

acif

ic

The Supramax market trend kept on proceeding to a very negative direction. A Tess58 dely EC China earned a very low $5,000/d for a trip via Indonesia to China with coal. The $7,000/d rate paid to a Dolphin57 from S China via Indonesia to China, despite the close delivery and vessel’s higher consumptions, was due mainly to the cargo type, the Indonesian bauxite, which most of the owners won’t load due to the very high risk coming from the moisture content well over the standards. The Handysize market on inter SE Asia trades was very much stable: a Dolphin57 was reported fixed for a trip via East Kalimantan to Thailand at $5,200/d while a 53,000 dwt got $11,050/d for the same trade dely very near to the loading port. On TransPacific trades, an Ultramax was fixed at $10,750/d bss dely Indonesia via S Australia and back to Singapore-Japan range, while a Dolphin57 dely EC China achieved $7,000/d for trip via N Australia to China with iron ore. From Indonesia a Dolphin57 achieved $9,950/d to WC India while another one was paid $10,500/d to carry clinkers into Bangladesh. On trades from N Far East ending up in the Middle East area, a Tess58 was fixed at $5,650/d from N China MEG-WC India range while a 50,000 dwt agreed $5,100/d for a very similar business. On period, a 5-years old 56,000 dwt was committed for 3/5 months at $10,500/d bss dely Singapore.

US

Atl

anti

c

Sou

th A

mer

ica

4

0

4,000

8,000

12,000

16,000

30/11/17 31/3/18 31/7/18 30/11/18

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

1-YR TC BSI TC

0

3,000

6,000

9,000

12,000

30/11/17 31/3/18 31/7/18 30/11/18

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

1-YR TC BHSI TC



BSI TC Avg. usd/day 10,915 10,950 -0.3% +1.7%

S4A 58 USG-Skaw/Pass usd/day 21,941 21,211 +3.4% +5.4%

S9 58 WAF-ECSA-Med usd/day 11,182 11,450 -2.3% +10.4%

S1B 58 Canakkale-FEast usd/day 24,268 24,393 -0.5% +45.3%

S11 58 Pacific r/v usd/day 7,478 7,629 -2.0% -18.5%

1 Year TC Period usd/day 10,750 11,000 -2.3% +4.9%

BHSI TC Avg. usd/day 9,043 9,176 -1.4% -0.8%

1 Year TC Period usd/day 9,500 9,500 +0.0% +5.6%

Sup

ram

axH

and

y

Rates

N E

uro

pe

M

ed

ite

rran

ean

Unit 30-Nov 23-Nov W-o-WPremium/

Discount

Dec (18) usd/day 12,617 11,625 +8.5% -8.7%

Jan (19) usd/day 11,683 14,425 -19.0% -15.4%

Feb (19) usd/day 10,508 12,925 -18.7% -23.9%

Q1 (19) usd/day 11,122 12,094 -8.0% -19.5%

Q2 (19) usd/day 12,233 13,683 -10.6% -11.5%

Q3 (19) usd/day 15,158 16,258 -6.8% +9.7%

Cal 19 usd/day 14,433 15,674 -7.9% +4.5%

Cal 20 usd/day 14,425 15,592 -7.5% +4.4%

Cal 21 usd/day 12,942 13,942 -7.2% -6.3%

Dec (18) usd/day 11,525 11,600 -0.6% -1.4%

Jan (19) usd/day 10,571 10,938 -3.4% -9.6%

Feb (19) usd/day 10,725 10,225 +4.9% -8.3%

Q1 (19) usd/day 11,040 10,692 +3.3% -5.6%

Q2 (19) usd/day 11,892 11,633 +2.2% +1.7%

Q3 (19) usd/day 10,871 10,829 +0.4% -7.0%

Cal 19 usd/day 11,413 11,228 +1.6% -2.4%

Cal 20 usd/day 10,167 10,058 +1.1% -13.1%

Cal 21 usd/day 9,125 9,050 +0.8% -22.0%

Dec (18) usd/day 11,129 11,217 -0.8% +2.0%

Jan (19) usd/day 10,879 11,125 -2.2% -0.3%

Feb (19) usd/day 10,758 10,671 +0.8% -1.4%

Q1 (19) usd/day 10,924 10,743 +1.7% +0.1%

Q2 (19) usd/day 11,675 11,650 +0.2% +7.0%

Q3 (19) usd/day 11,054 11,113 -0.5% +1.3%

Cal 19 usd/day 11,442 11,368 +0.7% +4.8%

Cal 20 usd/day 10,450 10,533 -0.8% -4.3%

Cal 21 usd/day 9,617 9,663 -0.5% -11.9%

Dec (18) usd/day 9,063 9,369 -3.3% +0.2%

Jan (19) usd/day 8,763 9,063 -3.3% -3.1%

Feb (19) usd/day 8,538 8,750 -2.4% -5.6%

Q1 (19) usd/day 8,664 8,650 +0.2% -4.2%

Q2 (19) usd/day 9,194 9,194 +0.0% +1.7%

Q3 (19) usd/day 9,050 9,050 +0.0% +0.1%

Cal 19 usd/day 9,124 9,124 +0.0% +0.9%

Cal 20 usd/day 9,069 9,063 +0.1% +0.3%

Cal 21 usd/day 8,938 8,938 +0.0% -1.2%

Han

dys

ize

Cap

esi

zeP

anam

axSu

pra

max

0

3,000

6,000

9,000

12,000

Nov-17 Nov-18 Nov-19 Nov-20

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)

banchero costa dry cargo chartering

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 43.59 40.69 +7.1% +72.5%

TD1 MEG-USG usd/day 13,431 7,227 +85.8% +250.4%

TD2 MEG-Spore ws 100.33 92.60 +8.3% +69.7%

TD3C MEG-China ws 98.46 91.35 +7.8% +70.5%

TD3C MEG-China usd/day 57,973 48,531 +19.5% +200.1%

TD15 WAF-China ws 98.71 89.89 +9.8% +53.3%

Avg. VLCC TCE usd/day 35,702 27,897 +28.0% +553.5%


TD6 BSea-Med ws 163.89 178.61 -8.2% +93.4%

TD6 BSea-Med usd/day 60,922 68,431 -11.0% +621.3%

TD20 WAF-Cont ws 125.59 141.88 -11.5% +48.8%

MEG-EAST ws 125.00 127.00 -1.6% +37.4%

MEG-WEST ws 65.00 65.00 +0.0% +58.5%

Avg. Suezmax TCE usd/day 48,133 54,802 -12.2% +382.4%


TD7 NSea-Cont ws 132.50 122.50 +8.2% +35.1%

TD7 NSea-Cont usd/day 25,328 18,186 +39.3% +4135.5%

TD17 Baltic-UKC ws 107.78 93.61 +15.1% +53.4%

TD17 Baltic-UKC usd/day 27,253 18,006 +51.4% +2121.1%

TD19 Med-Med ws 184.89 168.89 +9.5% +108.0%

TD19 Med-Med usd/day 40,232 33,205 +21% +4390.2%

TD8 Kuwait-China ws 166.11 155.33 +6.9% +53.8%

TD8 Kuwait-China usd/day 24,109 18,616 +29.5% +372.4%

TD9 Caribs-USG ws 117.22 175.00 -33.0% -26.6%

TD9 Caribs-USG usd/day 8,140 24,600 -66.9% -53.9%

Avg. Aframax TCE usd/day 25,059 22,698 +10.4% +333.3%


VLC

CSu

ezm

axA

fram

ax

tanker chartering banchero costa

Fundamentals remained strong in the Middle East Gulf for VLCCs, where a rather good amount of cargoes allowed rates to rise to about WS100 for East and to the lows WS40 for West. After a slow start, activity in West Africa picked up again towards the end of the week and rates for F East quickly firmed up to the very highs WS90. The Caribs market softened and kept $8 mln as the rate for fixtures to Singapore. The Suezmax market started showing some weakness in West Africa and, as activity slowed down a bit, rates for UKC softened down to around WS125. Lower levels of activity were recorded also in Med where, as the position list started looking slightly better for charterers, Bl Sea/Med rates closed just above WS160. Another positive week was recorded for Aframax Owners in Med as a constant flow of fresh cargoes easily pushed rates up above WS190 for CrossMed voyages. A rather busy week also in North Sea where, thanks to a tighter tonnage list, rates firmed up to about WS135 for CrossCont and WS107 off Baltic. Pretty tough week was recorded for Owners in the Caribs as a very quiet market let Caribs/USG rates quickly dropping down to WS120.

Crude Oil Tanker Market

6

Rates


0

15,000

30,000

45,000

60,000

30/11/17 31/3/18 31/7/18 30/11/18

VLCC MEG-Far East (usd/day)

-5,000

10,000

25,000

40,000

55,000

70,000

30/11/17 31/3/18 31/7/18 30/11/18

TD6 Suexmax BSea-Med (usd/day)

-5,000

5,000

15,000

25,000

35,000

45,000

30/11/17 31/3/18 31/7/18 30/11/18

TD19 Aframax Med-Med (usd/day)

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

Nov-17 Feb-18 May-18 Aug-18 Nov-18

1 YR TC Period (usd/day)

VLCC Suezmax Aframax

10,000

12,000

14,000

16,000

18,000

20,000

Nov-17 Feb-18 May-18 Aug-18 Nov-18

1 YR TC Period (usd/day)

LR2 MR2

0

5,000

10,000

15,000

20,000

30/11/17 31/3/18 31/7/18 30/11/18

MR Pacific Basket (usd/day)

0

5,000

10,000

15,000

20,000

25,000

30,000

30/11/17 31/3/18 31/7/18 30/11/18

MR Atlantic Basket (usd/day)

0

5,000

10,000

15,000

20,000

25,000

30/11/17 31/3/18 31/7/18 30/11/18

TC1 LR2 MEG-Japan (usd/day)

tanker chartering banchero costa

Product Tanker Market

Delays at Turkish Straits for Daylight Restricted Vessels

East of Suez, LR2 on MEG/Japan routes jumped from WS120 to WS150 (around $23,000/d TCE) while $2.2 mln were paid for UKC discharge. LR1 rose as well and MEG/Japan moved up to WS147,5 (around $14,000/d TCE). West of Suez rates for LR1 and LR2 fixed from Cont to Japan hit multi-year highs and closed the week at $2.6 mln and $2.3 mln respectively. The overall clean market for Handysize and Mr vessels in Europe and Med picked up last week: rates for clean Handysize on CrossMed routes jumped from WS170 to WS200 level, while B Sea loadings went up to WS215, always bss 30,000 mt. In Cont, clean Handysizes’ rates stepped up and closed at WS210 off Baltic and WS200 on CrossCont trades. Clean MRs fixing from the Cont towards US bss 37,000 mt set their benchmark at WS187.5 level, while backhaul voyages from the USG to Europe managed to obtain WS172.5 bss 38,000 MT. The dirty in Med for Handys and Mrs lept steady levels during the whole week. Rates for 30,000 mt on CrossMed trades remained at WS225/230 level and Bsea loadings at WS245. Even if there were few cargoes around, the tight position list, especially in EMed, prevented rates to drop. Tighter tonnage availability was recorded also in Cont where dirty market was very active and rates increased up to WS230/235 level bss 30,000 mt and WS170 bss 45,000 mt. Rates for dirty Panamax fixed from Cont/Med to TA were steady at WS137.5.



TC1 MEG-Japan ( 7 5 k ) ws 158.44 119.38 +32.7% +45.7%

TC1 MEG-Japan ( 7 5 k ) usd/day 23,891 12,004 +99.0% +206.7%

TC8 MEG-UKC ( 6 5 k ) usd/mt 25.08 22.23 +12.8% +22.6%

TC5 MEG-Japan ( 5 5 k ) ws 146.94 129.33 +13.6% +13.6%

TC5 MEG-Japan ( 5 5 k ) usd/day 14,574 9,786 +48.9% +78.5%

TC2 Cont-USAC ( 3 7 k ) ws 187.78 150.71 +24.6% +34.9%

TC2 Cont-USAC ( 3 7 k ) usd/day 15,518 9,164 +69.3% +180.8%

TC14 USG-Cont ( 3 8 k ) ws 173.75 153.13 +13.5% +47.9%

TC14 USG-Cont ( 3 8 k ) usd/day 13,968 9,944 +40.5% +372.1%

TC9 Baltic-UKC ( 2 2 k ) ws 211.07 160.71 +31.3% +48.5%

TC6 Med-Med ( 3 0 k ) ws 196.25 171.56 +14.4% +6.7%

TC7 Spore-ECAu ( 3 0 k ) ws 181.39 180.61 +0.4% -34.6%

TC7 Spore-ECAu ( 3 0 k ) usd/day 12,213 10,855 +12.5% -21.1%

TC11 SK-Spore ( 4 0 k ) usd/mt 10.32 10.18 +1.4% -11.9%

MR Pacific Basket usd/day 12,185 11,621 +4.9% -14.6%

MR Atlantic Basket usd/day 26,165 18,181 +43.9% +153.4%

LR2 1 Year TC Period usd/day 18,000 18,000 +0.0% +16.1%

MR2 1 Year TC Period usd/day 13,500 13,500 +0.0% -3.6%

TD12 Cont-USG ( 5 5 k ) ws 136.88 133.75 +2.3% +9.8%

TD18 Baltic-UKC ( 4 0 K) ws 233.67 220.83 +5.8% +37.5%

BSea-Med ( 3 0 k ) ws 245.0 245.0 +0.0% +11.4%

Med-Med ( 3 0 k ) ws 225.0 225.0 +0.0% +9.8%

Cle

anD

irty

Rates


Northbound days 9.0 8.0 +12.5% +38.5%

Southbound days 9.0 8.0 +12.5% +80.0%

600

700

800

900

1,000

30/11/17 31/3/18 31/7/18 30/11/18

Shanghai Container Freight Index

5,000

7,000

9,000

11,000

13,000

29/11/17 29/3/18 29/7/18 29/11/18

Geared - 1 YR TC Period (usd/day)

2500 1700 1100

6,000

8,000

10,000

12,000

14,000

29/11/17 29/3/18 29/7/18 29/11/18

Gearless - 1 YR TC Period (usd/day)

4250 3500 2700


ConTex index 423 430 -1.6% +5.5%

4250 teu (1Y, g’less) usd/day 10,168 10,259 -0.9% +32.5%



2500 teu (1Y, geared) usd/day 9,746 9,933 -1.9% +9.8%

1700 teu (1Y, geared) usd/day 8,155 8,372 -2.6% -2.7%

1100 teu (1Y, geared) usd/day 6,496 6,508 -0.2% +1.0%

The chartering market recorded good levels of activity for tonnage above 5,500 TEUs, while smaller sizes’ market, except the one of 1,100 TEUs, looked oversupplied with a fairly high volume of available tonnage. New Contex dropped seven points to 423 and the 1,700 TEUs was the most disappointing segment. The average operating margins of the major Carriers that have published their financial results turned positive in the third quarter of 2018 to 0.5% but far below the 5.3% level recorded over the same period last year.

banchero costa containers

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

Containership Market

Shanghai Containerized Freight Index (source: Shanghai Shipping Exchange)

8


Comprehensive Index index 890 904 -1.5% +21.6%

Services:

Shanghai - North Europe usd/teu 747 738 +1.2% +2.5%

Shanghai - Mediterranean usd/teu 783 755 +3.7% +30.9%

Shanghai - WC USA usd/feu 2,190 2,247 -2.5% +86.1%

Shanghai - EC USA usd/feu 3,403 3,652 -6.8% +79.0%

Shanghai - Dubai usd/teu 518 513 +1.0% +32.5%

Shanghai - Santos usd/teu 771 996 -22.6% -71.7%

Shanghai - Singapore usd/teu 148 143 +3.5% -10.8%


Recent Fixtures

Vessel Name Built TEUs TEU@14 Gear Fixture Period Rates

Northern Jasper 2009 8,814 6,923 no fixed to Zim 2-3 m $17,000/d

Chicago 2008 5,085 3,350 no extended to Maersk 2-6 m $8,150/d

Seaspan Manila 2007 4,250 2,805 no fixed to Kmtc 3-6 m $9,900/d

Oregon Trader 2006 2,490 1,820 yes fixed to Maersk 2-5 m $9,600/d

Hansa Duburg 2012 1,740 1,255 no fixed to Ts Lines 2-5 m $9,600/d

Lantau Arrow 2001 1,216 840 no fixed to Cosco 2-5 m $7,600/d

100

105

110

115

120

30/11/17 31/3/18 31/7/18 30/11/18

Yen/USD Exchange

1.10

1.15

1.20

1.25

1.30

30/11/17 31/3/18 31/7/18 30/11/18

USD/Euro Exchange

20

30

40

50

Dec-17 Mar-18 Jun-18 Sep-18 Dec-18

Newbuilding Prices (usd mln)

Ultramax LR2 MR2

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

USD 2.99 2.99 3.01 3.06 3.14 3.16

Euro 0.02 0.31 0.58 0.92 1.27 1.43

Libor USD Libor Euro Euribor Euro

6 Months 2.89 -0.33 -0.25

12 Months 3.12 -0.22 -0.15

banchero costa

In the Gas sector, Latsco signed 2 x LNG carriers around 180,000 cum at Hyundai with delivery during 1st half of 2021. Vessel will be operated through Consolidated Marine Management andp rice was rumored to be around $185 mln each. Furthermore, concerning LPG carriers, KOTC was reported to have exercised an option for 3 x around 84,000 cum to be delivered during 2020.

In the Tanker sector, Donsotank has ordered 1 + 2 optional product carriers (around 22,000 dwt) at Wuhu Shipyard. Vessel is planned to be delivered during 2nd half of 2020. In addition, Bashundhara Oil and Gas (part of the Bashundhara Group) has signed 8 x 4,200 dwt coastal tankers that will be built in their controlled yard in Bangladesh.

Newbuilding Market

Newbuilding Reported Orders

Indicative Newbuilding Prices (China)

sale & purchase

Interest Rates

Interest Rate Swaps

9

Unit 01-Dec-18 M-o-M Y-o-Y

Capesize usd mln 48.7 +0.6% +9.1%

Ultramax usd mln 26.4 +0.2% +7.5%

Supramax usd mln 23.2 +0.1% +7.3%

VLCC usd mln 83.3 +0.1% +6.8%

LR2 Coated usd mln 46.2 -0.1% +6.9%

MR2 Coated usd mln 33.8 +0.2% +2.6%

30-Nov 23-Nov W-o-W Y-o-Y

USD/Euro 1.14 1.14 +0.1% -4.1%

Yen/USD 113.6 113.0 +0.5% +0.9%

SK Won/USD 1,121 1,130 -0.9% +3.0%

Exchange Rates


Type Size Built Yard Buyers Price Comment

LNG 180,000 cbm 1H2021 Hyundai Latsco 185 2 units

LPG 84,000 cbm 2020 Hyundai KOTC n.a. 3 units. Option

declared

Tanker 22,000 dwt 2H 2020 Wuhu Shipyard Donsotanker n.a. 1+2 optionals

TYPE VESSEL NAME DWT BLT YARD BUYERS PRICE NOTE

Bulk Nord Hydra 77,134 2014 Imabari C.of Tokyo Century n.a. TC attached to

Norden

Bulk Nautical Amethyst 56,889 2011 Jiangsu New

Hantong C.of Loadline 11,3

Bulk Star Delta 52,434 2000 Tsuneishi Chinese buyers 6,1 DD due next

month

Crude Hull N°1161 157,000 2H2019 Yangzijiang C.of Delta Tankers 49,5

Crude Petrovsk 106,449 2004 Tsuneishi C. Of NGM 13 SS/DD due

1/2019

Prod Gan Tribute 49,999 2010 Hyundai Mipo C. Of JO Odfjell 19,5

Prod Gan Triumph 49,999 2010 Hyundai Mipo C. Of JO Odfjell 19,5

350

400

450

500

3/12/17 3/4/18 3/8/18 3/12/18

SubCon Demo Assessment (usd/ldt)

Dirty Tnk Clean Tnk Dry Bulk

15

20

25

30

35

3/12/17 3/4/18 3/8/18 3/12/18

Secondhand Values (usd mln)

Panamax Aframax MR

Unit 03-Dec 26-Nov W-o-W Y-o-Y

Dry Bulk usd/ldt 432.0 434.0 -0.5% +2.4%

Dirty Tanker usd/ldt 443.8 445.9 -0.5% +3.9%

Clean Tanker usd/ldt 446.0 449.0 -0.7% +5.7%

sale & purchase banchero costa

Secondhand Market

Baltic Secondhand Assessments

Baltic Demolition Assessment (Subcontinent)

10

Unit 03-Dec 26-Nov W-o-W Y-o-Y

Capesize usd mln 35.7 35.7 -0.2% +8.0%

Panamax usd mln 21.6 21.6 -0.2% +5.5%

Supramax usd mln 18.3 18.3 -0.1% +6.0%

VLCC usd mln 63.5 63.2 +0.5% +3.9%

Aframax usd mln 30.5 30.3 +0.5% +3.8%

MR Product usd mln 26.1 26.1 +0.2% +11.5%


In the Dry Bulk segment, market's uncertainty was pointed out by few transactions last week. Rumors giving Capesize "Euro Fortune" around 177,000 dwt 2005 built Mitsui as sold to region $15,5 mln were apparently false as Owners were holding out for much higher levels and may withdraw now the ship. The older Panamaxes "Genco Knight" and "Genco Vigour" around 74,000 dwt 1999 built Oshima have found buyers in China at $6,7 mln each. In the Supramax sector, there was another example of the difference in price between quality and Chinese tonnage. TESS Supramax "PM Hayabusa" around 58,065 dwt 2011 built Tsuneishi Cebu was sold for $17 mln to undisclosed buyers whilst a just 1,000 DWT smaller "Nautical Amethyst" around 56.900 dwt 2011 built Jiangsu New Hantong was sold to c. of Loadline Shipping for $11.3 mln only. Dazzling tanker rates were driving second hand market prices northbound. The resale Suezmax ex Yangzijiang was finally flipped to Delta Tankers at $49,5 mln for delivery September 2019. We would remind that the original order for this tanker was placed by Frontline with China Rongsheng s/y (Hull no. H1161 for delivery end 2018) but due to disturbances at said shipyard the vessel couldn’t be completed and hull was shifted to Yangzijiang. Payment terms were 25% deposit and 75% balance on delivery. The Suezmax “SCF Altai” failed and has been withdrawn from the market as Sellers were unable to lift subjects. Also the MR sector had its momentum allowing Sellers to find better prices. The two "Gan Tribute" & "Gan Triumph" around 49,999 dwt 2010 built HMD were sold at $19,5 mln each to Jo Tankers. Following the sale of "Alpine Minute" and "Alpine Mystery" around 49,999 dwt 2009 built HMD to c. of Norden, also the sister ships "Alpine Moment" & "Alpine Magic" same year were sold at same the price, namely region $17 mln each, but we are unable to confirm Buyers entity yet. The older MR2 "Ardmore Seatrader" around 47,000 dwt 2002 built Onomichi found Buyers in India for just in excess of $8 mln.

Secondhand Reported Sales

news banchero costa

Party's over: As margins tumble, China steel mills brace for hard times Chinese steel producers ran up losses for the first time in three years this month as prices slid into a bear market on weak demand and near-record supply, ending years of solid profit margins. And with the world's No. 2 economy cooling and facing increased risks from a growing trade war with the United States, China's steelmakers are likely to feel more pain unless Beijing launches fresh stimulus measures, traders and analysts say. Australia's Fortescue readies first shipment of new mid-grade iron ore Australia's Fortescue Metals Group is set to ship the first cargo of its new mid-grade iron ore next month just as a rout in Chinese steel prices helps it improve its margins in competition with higher grade products. The world's fourth-largest iron ore miner will make the first shipment of its 60.1 percent West Pilbara Fines product to customers in China, in a step that is set to bolster its margins, Chief Executive Elizabeth Gaines said. Citi analysts see oversupplied seaborne thermal coal market for next four years Seaborne thermal coal market would be well supplied for the next four years amid slowing demand in China and India, said Citibank analysts. "We expect the global thermal coal market to gradually shift from deficit to surplus in the next five years, due primarily to declining imports into Europe, China and India, as well as rising exports out of Indonesia and Australia," the analysts said. For 2018, while seaborne coal supply is seen at 956 million mt globally, demand is likely to touch 980 million mt, the analysts said. China December coal imports set to slump on new curbs - traders China's coal imports are set to slump in December as traders and utilities wind back purchases following signals from Beijing that it will stop clearing shipments until next year, trading companies and utilities told Reuters. Coal imports by the world's top consumer of the material used for heating and steelmaking rose in the first 10 months of 2018 to 252 million tonnes, up 11 percent from a year ago and not far below last year's total of 279 million tonnes, according to official data. Indian power utilities' October thermal coal imports up 27% on year Indian power utilities imported around 6.61 million mt of thermal coal in October, up 27% year on year, according to latest data from India's Central Electricity Authority released Tuesday. Of the total, around 1.92 million mt was imported by 18 utilities for blending purposes, while 4.69 million mt was imported by eight utilities that run their thermal power stations on imported coal only. During April-October, thermal coal imports stood at 33.95 million mt, up less than 1% year on year. Crop drop: China swine fever outbreak to curb its soybean imports China's imports of soybeans are set to drop as an outbreak of African swine fever hits its huge pig herd and saps demand for the animal feed ingredient, making it easier for buyers to keep shunning U.S. cargoes amid the Sino-U.S. trade war. African swine fever, deadly to pigs but not harmful to people, has spread rapidly through China, with more than 70 cases reported across farms since early August. Brazil's soybean farmers may start harvesting in December - AgRural Brazilian soybean farmers in the key state of Mato Grosso may start harvesting the crop before the end of December, agribusiness consultancy AgRural said on Friday, as the pace of sowing has been the fastest in history. Mato Grosso farmers, who have enjoyed great weather and an excellent start to the season, have basically finished planting. Brazil's overall soy planting reached 89 percent of an estimated 35.8 million hectare area in the 2018/19 season, compared with a historical average of 78 percent, AgRural said. Spoils of trade war: Argentina loads up on cheap U.S. soybeans A ship named the Torrent is nearing the end of a 5,000-mile trip carrying soybeans from the U.S. Great Lakes to Argentina - a journey that only makes economic sense because of the U.S.-China trade war. The ship is scheduled to dock in the Rosario grains hub on Dec. 4, days after the leaders of the world's two largest economies, U.S. President Donald Trump and Chinese counterpart Xi Jinping, hold high-stakes trade talks in Buenos Aires. EU sugar output could drop further as growers turn away from beet Sugar production in the European Union could drop sharply in 2019/20 as farmers consider slashing plantings and switching to other crops amid depressed prices, industry participants said on Tuesday. European producers are not planting extra beet area and some are turning to other crops offering better returns, Martin Todd, managing director at LMC International, told the International Sugar Organization's annual seminar in London. Source: Thomson Reuters/ Platts

Dry Bulk Commodities


news banchero costa

Oil & Gas

Singapore bans open-loop scrubbers One of the busiest port cities in the world, Singapore, is to ban the use of open-loop scrubbers in its waters. Andrew Tan, the outgoing chief executive of the Maritime and Port Authority of Singapore (MPA), said the decision to ban open-loop scrubbers had been made to protect the local marine environment. Open-loop scrubbers are currently banned in Belgium, California, Massachusetts and along Germany’s Rhine river with other countries understood to be looking at banning the technology. Three North Sea Forties oil cargoes dropped as Buzzard field shut The shutdown of Britain's largest oilfield for repairs is reducing supply of a North Sea crude that helps to set global prices, as trade sources said three cargoes due to load in December had been cancelled. The Buzzard oilfield, which pumps about 150,000 bpd and is the largest contributor to the Forties crude stream, has closed temporarily after the discovery of pipe corrosion. A smaller field linked to Forties, Total's Elgin-Franklin, is also shut for maintenance. Asia's Iran oil imports plunge to 5-year low in Oct Imports of Iranian crude oil by major buyers in Asia hit a five-year low in October, as China, Japan and South Korea sharply cut purchases ahead of U.S. sanctions on Tehran that took effect in early November, government and ship-tracking data showed. China, India, Japan and South Korea last month imported about 762,000 barrels per day (bpd) from Iran, according to the data, down 56.4 percent from a year earlier. Russia crude supply to China surges to record, Iran shipments sink -customs Russia shipped record volumes of crude oil to China in October as independent refiners continued to fill import quotas, while Iranian oil shipments fell on uncertainty over Washington's imposition of sanctions on Tehran, customs data showed. China's imports from top supplier Russia jumped 58 percent from a year earlier to 7.347 million tonnes, marking the highest ever and equivalent to about 1.73 million barrels per day (bpd). Iraq allocates 2019 oil sales Iraq has allocated its oil sales for 2019, with 67 percent of exports going to Asian markets, 20 percent to the Europe and 13 percent to North and South America, the oil ministry said. Iraq's 2019 oil sales will include shipments from the southern oilfields and Kirkuk, the ministry said in a statement. China to issue 2 mln T of new fuel export quotas for 2018 due to glut The Chinese government is set to release 2 million tonnes of refined fuel export quotas for this year, taking total quotas for 2018 to about 48 million tonnes, according to two sources briefed on the matter on Tuesday. These new quotas, mostly gasoline and diesel and following the release of 2.93 million tonnes of quotas a month ago, reflect slower than expected domestic demand for transportation fuels, one of the sources said. Asian gasoil refining margins skid to 4-mth low as China opens export taps Asian refining margins for gasoil slid to their lowest in four months on Wednesday, squeezed as traders brace for a flood of extra Chinese fuel hitting a region already awash in supplies at a time of unexpectedly lacklustre demand. Refining margins - known as 'cracks' - for gasoil with 10 parts per million (ppm) sulphur content fell to $14.52 a barrel over Dubai crude on Wednesday, their weakest since Aug. 2. Wave of refinery shutdowns may push India into importing fuel next year A wave of shutdowns will hit Indian state-owned refineries next year as the country prepares for cleaner fuels from April 2020, company officials said, which could temporarily hit oil demand and push up refined fuel imports. India, the world's third-biggest oil importer and consumer, has surplus refining capacity and rarely imports gasoil and gasoline. U.S. crude stockpiles build for 10th straight week - EIA U.S. crude oil stockpiles rose for a 10th week in a row last week even as refineries boosted output and exports increased, the Energy Information Administration said on Wednesday. Crude inventories rose 3.6 million barrels in the week to Nov. 23, compared with analysts' expectations for an increase of 769,000 barrels. Global LNG prices on downward spiral amid warm winter, high stocks Asian spot prices for liquefied natural gas (LNG) continued their downward spiral this week, falling to a four-month low as demand from top buyers Japan and China failed to materialise amid ample inventory. Spot prices for January delivery in North Asia were estimated at about $9.80 per million British thermal units (mmBtu), down 20 cents from the previous week, while spot prices for cargoes delivered in February were estimated at about $9.70 to 9.80 per mmBtu, according to trade sources. Source: Thomson Reuters/ Platts

market report - week 48/2018 12

300

400

500

600

30/11/17 31/3/18 31/7/18 30/11/18

Wheat and Corn Prices (usd/t)

Corn Wheat

3,000

3,500

4,000

4,500

5,000

23/11/17 23/3/18 23/7/18 23/11/18

Steel Prices in China (rmb/t)

Rebar Plate

40

60

80

100

120

30/11/17 31/3/18 31/7/18 30/11/18

Iron Ore and Coal Prices (usd/t)

Steam Coal Iron Ore

40

50

60

70

80

90

30/11/17 31/3/18 31/7/18 30/11/18

Brent and WTI Oil Prices (usd/bbl)

Brent WTI

200

400

600

800

30/11/17 31/3/18 31/7/18 30/11/18

Bunker Prices @ Singapore (usd/t)

IFO 380 IFO 180 MGO


Wheat usd/t 522.3 504.8 +3.5% +25.9%

Corn usd/t 371.5 359.0 +3.5% +7.7%

Soybeans usd/t 911.5 881.3 +3.4% -8.3%

Palm Oil usd/t 488.3 487.2 +0.2% -23.4%


Iron Ore (Platts) usd/t 64.8 74.2 -12.7% -8.1%

Iron Ore China @Tangshan rmb/t 535.0 587.0 -8.9% +6.6%

Rebar in China rmb/t n.a. 4,173 n.a. n.a.

Plate in China rmb/t n.a. 4,159 n.a. n.a.

HR Coil in China rmb/t n.a. 3,946 n.a. n.a.

CR Sheet in China rmb/t n.a. 4,505 n.a. n.a.


Steam @ Richards Bay usd/t 94.3 92.5 +1.9% +0.3%

Steam @ Newcastle usd/t 102.9 101.8 +1.1% +6.1%

Coking Coal Australia usd/t 221.0 221.0 +0.0% +0.2%


Crude Oil Brent usd/bbl 62.6 59.4 +5.3% -1.7%

Crude Oil WTI usd/bbl 53.8 50.8 +5.8% -7.9%

Crude Oil Dubai usd/bbl 58.6 61.7 -5.0% -3.5%

Natural Gas Henry Hub usd/mmbtu 4.49 4.10 +9.5% +46.7%

Gasoline Nymex usd/gal 1.47 1.40 +5.0% -15.5%

ICE Gasoil usd/t 580.3 576.3 +0.7% +3.1%

Naphtha Tokyo usd/t 493.2 526.0 -6.2% -15.6%

Jet-Kerosene Asia usd/bbl 73.4 83.1 -11.7% -2.5%


Rotterdam usd/t 359.0 389.0 -7.7% +2.9%

Gibraltar usd/t 411.5 441.0 -6.7% +11.5%

Singapore usd/t 413.0 460.0 -10.2% +9.8%

Rotterdam usd/t 398.0 432.5 -8.0% +4.7%

Gibraltar usd/t 440.0 468.0 -6.0% +11.8%

Singapore usd/t 445.0 491.5 -9.5% +10.7%

Rotterdam usd/t 549.0 587.5 -6.6% +0.9%

Gibraltar usd/t 616.0 660.0 -6.7% +5.1%

Singapore usd/t 559.0 601.5 -7.1% +0.5%

IFO

38

0IF

O 1

80

MG

O

banchero costa commodities

Oil & Gas Prices

Coal Prices

Iron Ore and Steel Prices

Agricultural

Bunker Prices


head office: via pammatone, 2 16121 genoa (italy)

phone: + 39-010-[5631-1]

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