# My, how things have changed...



## non descript (Nov 18, 2005)

In the early 80's it was doom & gloom and usd2,000 per day and now, we see rates beyond our wildest dreams....

From today's Tradewinds:

_
*High five *
Glory Wealth signed up for a Bocimar capesize for five years at a high $50,000 per day on a day where a couple or major players made big bucks off relets in the larger tonnage sector. 

Panamax rates generally took a tumble with a few Far Eastern names splashing out $55,000 on charters with pick-ups in South America, while elsewhere rates were much flatter than they have been recently. 

Although there was a dearth of any real action amongst supramaxes the two deals that were struck managed handsome sums in the $40,000s. 

*Capesizes *
The Bocimar unit going to Glory Wealth for five years is the 172,000-dwt Mineral Azalea (built 1999). The charter begins in the last quarter of next year at $50,000 per day, above recent rates achieved for the term. 

Cargill is pocketing a fortune from the relet of the 172,500-dwt Gran Trader (built 2001) to Taiwan Maritime Transport for between two and four months at $101,250 per day. Cargill originally took the ship back in August for $57,000 daily. 

Also profiting handsomely is Swiss Marine which relet the 171,900-dwt Andros Warrior (built 1986) to Nobel for a China-Australia roundtrip at $85,000 having picked it up in August for 14-18 months at just $35,500. 

STX Pan Ocean is paying a meaty $94,000 per day for a trip from China to Brazil and back to South Korea with the 179,900-dwt Quorn (built 1996). 

*Panamaxes *
Transfield booked two units to make Europe-South America-China trips at $55,000 per day, the 72,500-dwt Coal Pride (built 1999) and the 71,300-dwt Fu Da (built 1997). 

SK Shipping is also paying that plus a ballast bonus of $1.1m to take the 69,600-dwt Full Sources (built 1994) on a trip from Brazil to UAE and onward. 

Golden Ocean has relet the 72,200-dwt Vogetrader (built 1996) to MOL for a trip from Taiwan to Australia and back to Japan at $40,000. The former is believed to have taken the ship in March for between four and six months at $36,500. 

OBS is also paying $40,000 per day for a Taiwan-Indonesia roundtrip with the 74,100-dwt Little Prince (built 2001). 

Clipper is making a nice bit of money off reletting the 65,600-dwt Pearl C (built 1987) to Sinotrans for a Pacific voyage at $31,500 per day having taken the ship in September for a year at just $20,000. 


By Eoin O'Cinneide in London _


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## Steve Woodward (Sep 4, 2006)

Fair returns for a well run ship Mark, a good sign for the future. But will it see off the sub-standard old bulky that occasionaly turns up, lets hope so
Steve W


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## non descript (Nov 18, 2005)

Steve,

With an SWS type (like *China Progress*) now costing usd100.0m versus the usd30.0m when the design was first produced, the rate of hire is indeed justified.

As for weeding out the old, sub-standard, tonnage, all I can say is "Yes Please", we really cannot go back to the dark days.

Regards
Mark


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## Geoff Garrett (May 2, 2006)

An opportune natural progression, before they literally crack up!


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## John Cassels (Sep 29, 2005)

What a change. Last cape sized bulker I fixed in 1999 was for usd.8,500 pd
and she was then only a year old.


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## gdynia (Nov 3, 2005)

Mark
We are still getting junk out here on the spot markets at sky high prices


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## non descript (Nov 18, 2005)

John Cassels said:


> What a change. Last cape sized bulker I fixed in 1999 was for usd.8,500 pd
> and she was then only a year old.


Yes John spot on, they were indeed painful times; at that time we were fixing out ships at USD8,000 p/day that were costing us USD17,500 to run.


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## non descript (Nov 18, 2005)

*Baltic Dry Index hits all time high*

Courtesy of Lloyd's List 11th October 2007:

Baltic Dry Index hits all time high
By Neville Smith - Wednesday 10 October 2007


_Tight tonnage supply in sector
THE dry bulk market has continued to bask in an Indian summer, with the Baltic Dry Index passing 10,000 points for the first time since its inception in 1985. 

The index rose 358 points to 10218 as appetite for raw materials continued combined with tight tonnage supply. 

Capes and panamaxes led the charge but Baltic Exchange Freight Market Reporter David Bradley pointed out that increases were being felt across the vessel sizes, with handies commanding what were once considered capesize rates. 

He was cautious about calling the top of the market’s most profitable boom. 

“It has been called before but the old principles no longer seem applicable. It seems set to keep going.” 

“The availability of paper for hedging makes people more confident to fix at these rates and there is a lot of speculation out there too, he added. 

SSY Research director Peter Norfolk said the strength of major commodity prices, a tight tonnage position and a resticted orderbook suggested the market would be strong for the rest of the year. 

“The market looks very well supported. Commodity prices across the board are very strong compared to a year ago. Add in the shortage of tonnage and you have the receipe for a strong market,” he said. 

Normally market watchers would expect a glut of tonnage bringing the market down. “It doesn’t look like that will happen in the near term. Delivery volumes in 2008 will be similar to 2007 which have been easily absorbed this year.” 

And though the artificial prop of port congestion on the east coast of Australia had eased in recent months, it was still strong enough “to see no diluting effect on rates,” he said. _


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## non descript (Nov 18, 2005)

To put the above in terms of dollars per day, a fixture concluded today is: 
*Alpha Era * Capesize bulker, built 2000 170,387 dwt, delivery Far East 7/22 Dec for 11/13 months trading, redelivery worldwide usd152,750 daily - for the account of Bunge


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## John Cassels (Sep 29, 2005)

If for some reason they don't make the laycan 7/22 dec. would imagine
there will be a few sad faces.


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## non descript (Nov 18, 2005)

John Cassels said:


> If for some reason they don't make the laycan 7/22 dec. would imagine
> there will be a few sad faces.


John

You make a very fair point, and by the old standards, such a tight laycan is unduly risky for 2 months ahead, but frankly the way the market is going, it would be a brave soul who would say that the ratewill be less come 23 December... (Thumb) 

Mark


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## marinero (Jan 1, 2007)

Hi Mark.
Just browsing this thread. Must admit to not knowing anything about chartering but it appears they make money by reletting ships they have already chartered, sounds fascinating stuff. Mind you though I suppose it could go the other way if rates drop. Where can I read more on this subject?
Regards
Leo (Thumb)


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## non descript (Nov 18, 2005)

Leo
As you say, on the face of it the concept seems like money for old rope, but it only works on a rising market; and whilst we have over the past months enjoyed an unrelenting climb, it can and does go the other way. Sadly we have first hand experience of that, as got it wrong in 1997 and took a ship for 5 years that lost money day after day for first 4 years and only thanks to an optional 6th year and a Purchase Option, did we escape with some pennies in our pocket.

The most likely place for watching this is still Lloyd’s List, or maybe Tradewinds, which is a more specialized market paper, as the former covers every aspect of the Maritime World.
Regards
Mark


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## PollY Anna (Sep 4, 2006)

Sounds like a good time to be a Ship Owner

Regards Ron


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## marinero (Jan 1, 2007)

Thanks for that Mark. Is insurance available to cover losses in the instance you quoted? Mind you though, I would think a lot of nerve would be required in what could be a very volatile market.
Regards
Leo (Thumb)


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## Iain B (Apr 28, 2007)

marinero said:


> Thanks for that Mark. Is insurance available to cover losses in the instance you quoted? Mind you though, I would think a lot of nerve would be required in what could be a very volatile market.
> Regards
> Leo (Thumb)


You can insure pretty much anything, but this is a market and banks don't insure the exchange rate of the dollar to the Euro for 2008, and farmers don’t insure the price of milk for next year. 

This is where the city boys in the trading houses and brokerage establishments earn their daily bread. 

If you have long term commitments for physical cargoes over a period where you think the market is rising you will want to fix some tonnage on COA's or longer term time charters to cover it. If you think the market will go down you fix short term voyage charters to get a cheaper ship to carry it in the future. 

The opposite applies if you are an owner. If the market is rising and you think it will rise some more - then don't commit your tonnage for longer periods and at rates below what you think you can achieve later. 

There are clever derivatives, just like the financial markets where you can lay off the risk of physical cargoes with 'paper' cargoes, but that’s all a bit beyond me.

Take this a an opportunity to see the shipping business for what it is – put these figures into perspective, Cape sizes are making a fortune for the owners carrying ore from Brazil to China at about $40 per tonne (and still rising). How far would you get if you were to road haul a tonne of iron ore for £20?


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## John Cassels (Sep 29, 2005)

Iain , ore brazil/china at $40 and rising. know a couple of old owners/
operators who would be crying in their soup if they knew that !.


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## non descript (Nov 18, 2005)

John Cassels said:


> Iain , ore brazil/china at $40 and rising. know a couple of old owners/
> operators who would be crying in their soup if they knew that !.


To add the icing to the cake... the rate for Brasil/China is tonight (24th October 2007) standing at usd88.304 per metric tonne


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