World News
Baltic Dry Index Continues to Rise, Hits 313, as Idling of 3yr Old Vessels is Now Being "Seriously Considered"
The Baltic Dry Index (BDI) continued to rise Thursday, gaining another 6 points to reach 313, while the latest steps being employed by dry bulk players to help weather the historically dire markets could now include idling vessels as young as 3 years old.
Average TC sport rates for Capesize vessels declined for a second day, falling $27 to $2,772 per day.
However, both Panamax and Supramax segments continued to rise, with Panamax rates gaining $12 to reach earnings of $2,874 per day, and Supramax rates jumping $117 to reach $2,827 per day.
"We all agree the market is oversupplied, utilisation is around 75 percent," said Golden Ocean Group Ltd. (Golden Ocean) CEO Herman Billung at the company's latest earnings presentation.
In the face of vessel oversupply, Billung says that the company is "seriously considering" idling vessels that are 3 to 5 years of age, a practice that he says will likely become a more common activity within the dry bulk market.
"For older vessels I am confident you will see massive scrapping," said Billung, adding that Golden Ocean has scrapped 25 vessels for the year.
Billung also noted that 20 percent of its current fleet are scrapping candidates over next 2-3 years.
In addition to scrapping and idling, Billung says that ship owners are cancelling or delaying newbuild orders and deliveries.
"The order book was at 126 million DWT at the start of the year," he explained.
"I think there will be massive delays. I think it is a fair assumption that the order book now is 90 million DWT and it will be spread out more in time.
On Thursday, Ship & Bunker reported that the pace of dry bulk vessel demolition is reported to have accelerated over recent weeks, with Erik Nikolai Stavseth and Kurt Waldeland, shipping analysts at Arctic Securities AS (Arctic), estimating that about 50 million DWT will be scrapped during the 2016 year as a whole.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 649.00 | 0.50 | 775.00 | 3.50 |
| Rotterdam | 603.50 | 1.50 | 759.50 | 11.50 |
| Houston | 626.50 | 2.50 | 794.00 | 2.00 |
| Fujairah | 649.00 | 0.50 | 904.50 | 6.50 |
| Global 20 Ports Average | 664.00 | 2.00 | 855.00 | 0.00 |
| Global 4 Ports Average | 632.00 | 1.00 | 808.00 | 4.00 |
| Global Average Bunker Price | 716.50 | 1.00 | 901.00 | 12.50 |
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