World News
MSI predicts 2016 Dry Bulk Rebound, Weaker Tanker Markets
In sharp contrast to predictions from other analysts this week for Dry Bulk, Maritime Strategies International this week in its latest forecasts said it believes freight rates for Capesize and Supramax vessels will rebound in the second quarter of 2016.
The UK-based research and consultancy group says the Capesize rebound will be due to the restocking of iron ore in China, while Latin American grain shipments could drive Supramax's rate increase.
Earlier this week, Morgan Stanley downgraded multiple public dry bulk owners, saying the sector is expected to remain under pressure through 2017; it also predicted a 23 percent reduction of Capesize spot rates to $9,000 per day next year.
But MSI predicts that spot daily earnings for a 170,000 deadweight tonnage Capesize rate will fall to $4,200 per day next February and then rise to $9,700 per day by May.
Supramax daily spot rates will decline to $4,800 per day next February and then climb to $7,200 per day by May, according to the consultancy.
Will Fray, analyst for MSI, said, "Whilst we are undoubtedly bearish about the state of the market, we believe that the FFA forward curve is too pessimistic for Q2 next year, primarily for Capesize and Supramax vessels."
However, MSI notes that the new Ultramax vessels will dominate the long-haul Latin America grains business at the expense of Panamax ships, whose daily spot rate will be the lowest of benchmarks at $6,000 per day next May, MSI says.
In the tanker sector, MSI believes the upside potential remains high but a flood of new tonnage - likely to be the second-highest ever number of newbuild tanker deliveries - will suppress rates through the second half of 2016.
In August, J. Lauritzen president and CEO Jan Kastrup-Nielsen warned that "if the dry bulk market is low for a sufficiently long period of time, then there will be no dry bulk carriers left: it's as simple as that."
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 510.00 | 2.50 | 611.00 | 4.00 |
| Rotterdam | 477.00 | 1.00 | 618.50 | 4.00 |
| Houston | 469.50 | 0.50 | 610.00 | 2.00 |
| Fujairah | 501.50 | 1.50 | 708.50 | 3.50 |
| Global 20 Ports Average | 532.00 | 2.00 | 711.50 | 0.00 |
| Global 4 Ports Average | 489.50 | 0.50 | 637.00 | 0.50 |
| Global Average Bunker Price | 571.00 | 1.00 | 759.00 | 0.50 |
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