HANSA 01-2020

Märkte | Markets
Market lacklustre but stable at year-end
No rate-slashing for charter vessels as challenging year draws to a close. Early rebound in
charter demand expected for 2020. By Michael Hollmann
Hire rates for container charter vessels
remained fairly static in the final
weeks of 2019, defying normal seasonal
patterns of heavier losses during the
fourth quarter. Market indices such as
the New ConTex and the Howe Robinson
Containership Index recorded only marginal
falls over the past weeks and will finish
the year on a significantly higher level
than 2018 – at around +5.0% (New Con-
Tex) and +26.0%, respectively.
The increases are based on improved
fixing levels especially for post-panamax
and panamax-type vessels which benefited
from liner requirements to replace ships
taken out of service for scrubber retrofit.
Although fixing activity began to slow
from late November, according to brokers,
rate levels continued to be supported by
tight tonnage availability in the larger sectors.
This tightness mainly results from
the ongoing high levels of retrofit activity,
with the total number of ships withdrawn
from trading for scrubber installations reaching
102 as per 9 December, according
to Alphaliner.
They represent 950,000 TEU or 4% of
worldwide fleet capacity. As a result, the
spot supply of ships in the larger sectors,
which are responsible for the bulk
of scrubber installations, even trended
down over the past weeks. On 16 December,
Alphaliner counted 10 vessels in spot
position in the segments from 4,000 TEU
upwards, against 13 on 2 December and
17 on 18 November.
Chartering activity remained sporadic
for larger tonnage although by middle
of December there was a growing chorus
among brokers who suggested that
enquiry for bigger ships was already on
the increase, mainly for forward delivery
in January/February. The few fixtures
and extensions that leaked through signalled
a stabilisation of rates, with one
6,000 TEU unit – the »E. R. Los Angeles«
– fetching 19,000 $/day for 4-6 month
period with OOCL in Asia. Further, there
were rumours of one 8,500 TEU vessel,
coming open at the end of December
following scrubber retrofit, and one Imabari
6300 type getting fixed. Details did
not get available, but the fact that Howe
Robinson lifted its charter assessment for
gearless 6,500 TEU type vessels by 11%
week-on-week on 18 December suggests
that last-done levels have been outstripped
by far. Demand for wide-beam panamax
vessels seemed to pick up again as well following
a slack period in November when
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some ships got bunched up in spot positions
resulting in sharp rate falls. Latest
available fixture data signals a slight recovery
to 19,000 $/day net of address commission
for 5,400 TEU wide-beam vessels.
Brokers say that spot availability has dropped
to zero again.
Meanwhile the panamax segment continues
to see a steady flow of requirements
from liner operators, resulting in an average
of 4 ships fixing or extending employments
week after week. Rate levels
began to decline somewhat in December,
though, illustrated by latest fixtures
of baby panamax units at mid-13,000’s
$/day (down from 14,000) and of maxipanamaxes
at 12,000 $/day (down from
13,000). However, spot supply looks manageable
at around 10 units and is set to
tighten quickly once tonnage demand
picks up, brokers say. There are rumours
that two 5,000 TEU panamaxes, equipped
with scrubbers, are about to be fixed
at $16,000 per day for two-year periods,
heralding a firmer trend.
Below 4,000 TEU, the market was again
described as being »uninspiring«, with diverging
trends in activity levels, but rates
merely moving sideways or slightly easing.
The 3,400 TEU segment was notable for a
drop in fixing volumes, so were the geared
2,500 TEU and the geared 1,700 TEU segments
which previously registered a relatively
strong flow of fixtures. Yet, rate levels
for geared 2,500 TEU ships kept stable
at around $10,000 per day both east and
west of Suez so far. In the 1,700 TEU segment,
owners seem to bow to the growing
pressure as highlighted by recent fixtures
of geared Wenchong 1700 type ships
at 8,300 $/day, down from 8,500 $/day.
One German broker suggested that service
consolidation among intra-Asian
carriers would result in increased redeliveries
over the coming weeks. For feeder
ships of 1,000-1,200 TEU, the picture was
unchanged in the Asian market, with CV
1100’s achieving $6,000 and 1,134 TEU
Orskov type ships $7,500.
The smallest classes below 1,000 TEU
benefited from increased short-period and
extra loader requirements, related in part
to bad weather and schedule delays in Asia
and to new transhipment requirements in
Europe due to the resumption of one Far
East/Europe deepsea service. Global spot
availability in the 500-1,000 TEU segments
dropped to just 8 vessels by 16 December,
according to Alphaliner. Yet, rate
levels remained unchanged.
Market expectations for smaller charter
vessels are still moderately positive for
2020, with one major broker stating that
tonnage availability two months forward
is the lowest it has been in years. Others
suggested that the transition to low-sulphur
fuels (IMO 2020) might prompt operators
to reduce sailing speeds for feeder
vessels to cut fuel costs. Scrubber installations
are the exception in the segments
below 3,000 TEU, so ships will be forced
to burn the much more expensive lowsulphur
fuel oil or marine gas oil. n
8 HANSA International Maritime Journal 01 | 2020