28 April 2017

POINTS OF VIEW
CONTENTS The stock market had high expectations of Donald Trump. It took him on his word that
he would reduce taxes and increase spending; this prospective stimulus supported the
WEEKLY COMMENTARY

Trump Trade and drove the DJIA and S&P 500 to record levels*. Tomorrow will mark
2. Dry Cargo Chartering his first 100 days in office. It has become apparent that the checks and balances provided
Panamax Panic? by Congress will prevent him from executing many of the most stimulative plans that he
flagged up on his campaign trail. The large size of the US budget and current account
deficits demands that any new spending measures be fiscally neutral, meaning that any
3. Dry Cargo S&P increases in spending in one area must be met by equivalent saving in another. He was
Maypole Dance unable to repeal Obamacare, as he was blocked by Congress, and yet this one measure
was to provide the funding for all the promised tax cuts, and so tax reform is at risk. He
was going to terminate Nafta but now is going to renegotiate it. He was going to build a
4. Tankers Mexican wall and get Mexico to pay for it; but now it is more figurative and the US will
Product Plateau fund it. He was going to withdraw America from its role as global policeman; then he
bombed Syria and Afghanistan and threatened to annihilate North Korea. The
boomerang effect would make such action militarily disastrous and financially ruinous,
neither of which the US needs right now. South Korea is being supplied with Thaad**, to
intercept incoming ballistic missiles, and an invoice for one billion dollars. However, the
THE BIGGER PICTURE Norths 14,000 long-range heavy artillery pieces are still trained on Seoul and Thaad can
do nothing about them. He was going to ban people from certain Muslim countries from
THE BIGGER PICTURE entering the US, until he changed his mind. He had regarded Nato as obsolete before
appreciating its importance in checking Russian adventurism. He had planned on
launching trade wars to reverse the current account deficit, revitalise domestic industry
and bring jobs back to the Rust Belt. But his business advisers have managed to tone
down these radical plans and avoid a breakout of global protectionism in return for
Promises, Promises
more assertive US hustling for better terms of trade. As suggested in The Times today^,
Mr Trump shouts first and negotiates second, departing from the more conventional
policy of speaking softly and carrying a big stick. He has a strong team around him and
the more extreme promises of the campaign trail are being gently tweaked into a set of
more achievable deliverables, and that is a very good thing.
One area where Trump is reversing Obamas policy is environmental: he has approved
the Keystone XL pipeline and is permitting more drilling on federal lands. The realisable
target is to become self-sufficient in oil and gas rather than continue with energy import
dependency on overseas producers, many of which are perceived as anti-American. This
has huge implications for the oil tanker trades. Opecs earlier decision to flood the
market and collapse oil prices was an attempt to bankrupt North American oil sands and
tight oil producers. Brent duly sank to a cyclical low of $27 a barrel in January 2016 and
some producers did indeed disappear while others stripped out costs and became more
Source: The Financial Times resilient. Without the legacy and budget costs of most Opec members many shale oil
producers can make money at $40 for WTI. In November last year Opec, together with
a non-Opec-11, reversed course and agreed to cut output by a combined 1.8m-bpd in
1H17 in an attempt to rescue prices and reduce OECD stocks. Since then, Brent peaked
at around $57 and has averaged about $54, the North American rig count is rising and
inventories remain at high levels; so, not a resounding success for Opec. After oil prices
fell from a peak of $115 a barrel in June 2014 tanker owners enjoyed a strong 18-month
trading environment to end 2016. Lower oil prices boosted consumption and promoted
seaborne movements into commercial and strategic storage. The Opec output cuts of
the past six months have reversed the formerly benign trading conditions as oil prices
have risen, the contango in the futures curve has disappeared and both seaborne and
*1Q17 GDP growth came in at an annualised 0.7%, the lowest in land-based stocks are being drawn down. Shipping activity has decreased and, to make
3 years. matters worse, the new tankers that inevitably were ordered in the 2014-2015 boom
are now joining the fleet, increasing competition and decreasing utilisation. Since the oil
**Thaad: Terminal High Altitude Area Defence.
price peak in mid-2014 tanker earnings have been volatile, as usual, and secondhand
prices have reflected the trend. The BSPAs show that a 305K/2012 VLCC was worth
^Trumps radicalism has had a reality check, by Edward Lucas.
$72.8m in mid-2014, peaked at $80.8m in Sep-2015, hit a low of $59.2m in Feb-2017 and
^^DHT rejected Frontlines approach in favour of taking 11 has since rebounded to $59.9m. A 51K/2012 MR was at $26.6m in mid-2014, peaked at
VLCCs from BW in exchange for 33.5% of the enlarged company. $28.3m in Feb-2016, hit a low of $20.8m in Jan-2017 and has since rebounded to
Not to be outdone, FL is now trying to buy the new DHT in its $22.4m. Importantly, both earnings and values imply that the worst is past for tankers.
pursuit of 30 more VLCCs.
JF, an occasional master of timing, is trying to swoop on 30 VLCCs^^, so we must be at
the bottom unless, of course, the markets promise is a Trumpian one.
 WEEKLY COMMENTARY
28 April 2017
Dry Cargo Chartering
The BDI closed today at 1109 points, down 61 week on week. The NYK fixed the Afroessa (78,175-dwt, 2014) for a trip delivery
capes stayed steady, the panamaxes dropped drastically and the handies Zhanjiang via Indonesia, redelivery India at $11,000. Yarra (78,141-dwt,
and supras had a wee wobble. 2015) fixed delivery Hong Kong for a trip via Newcastle, redelivery
Philippines at approximately $11,250. Bulk Marine fixed the Rigel
The capesize market was not its usual volatile self this week, instead it (72,465-dwt, 1998) delivery Rizhao for a trip via China, redelivery
showed us its placid side. The timecharter average closed at $13,285, a India with metcoke at $9,100. No period fixtures were reported.
drop of less than 1%. In the Pacific, the Port Hedland/Qingdao ore run
saw numerous fixtures around the low $6 mark with Rio Tinto covering The Supramax fell this week by 34 points with the index finishing at
170,000/10% at $6,10pmt and BHP Billiton fixing on the platform for the 861. The timecharter average for the Supras took a tumble of $383
same run at $6.15 and $6.18. On timecharter, Hyundai Glovis fixed the down to $9,675. On the period front, Red Sakura (60,245-dwt, 2017)
G. P. Zafirakis (179,492-dwt, 2014) delivery Baoshan for a trip via achieved a healthy rate of $12,500 from an unknown charterer for 4/6
Australia at $16,000, redelivery Singapore-Japan. In the Atlantic, Cargill months with delivery Padang, Indonesia and Eraclea (54,876-dwt,
fixed the KSL Sapporo (180,960-dwt, 2014) delivery Ijmuiden for a 2010) fixed with KLC for 4/6 months for worldwide trading delivery
TransAtlantic round voyage at $14,950. On Voyage, NYK covered Shuaiba at $10,000. Meteora (58,480-dwt, 2007) fixed a front haul out
170,000/10% Ore for Ponta Da Madeira/Qingdao end of May dates at of the US Gulf with Klaveness at $20,000. In the Atlantic, Akra
$14.95pmt. On period, Koch Carbon were reported to have fixed MV (61,302-dwt, 2016) fixed a trip out of Doula for early May dates to
New York (177,773-dwt, 2010) retro CJK min 6 months, up to maximum East Mediterranean via East Coast South America at $12,000 with a
end of December at $14,450. charterers option for Singapore-Japan redelivery to include $300,000
bb. In the Pacific, Lowlands Amstel (61,117-dwt, 2015) fixed out of
The panamax market continued to nose dive, closing at $9,541, down Xingang for a trip via the NoPac back to Singapore-Japan at $9,500.
from last weeks close of $11,982. Rates for all routes in both Atlantic The Handysize index dropped by 16 points to close at 559. This
and Pacific were in the red throughout the week. In the south Atlantic, worked out to a fall in the timecharter average of $264 over the
Cargill fixed the Yasa Eagle (81,525-dwt,2012) delivery Santos for a trip week, ending up at $8,166. No period fixtures were reported this
to Singapore-Japan range at $13,000 plus $600,000 bb. Commerge fixed week on the handies, however in the Atlantic, Dora Oldendorff
the Figalia Prudence (81,498-dwt, 2012) delivery East Coast South (33,108-dwt, 2010) was fixed by Thorco at $13,000 for a trip out of
America redelivery Singapore-Japan range at $14,500 plus $450,000 bb. River Plate for prompt dates with redelivery Algeria and St George
Azure fixed the Bulk Finland (77,126-dwt, 2014) delivery East Coast (32,688-dwt, 2009) fixed out of Skaw for a trip to the East
South America for a trip redelivery Skaw-Gibraltar range at $16,500. Mediterranean at $11,000 to unknown charterers. Moving over to the
Further North, Norden fixed the Sinochart Beijing (81,664-dwt, 2012) Pacific, in the Far East Maratha Pride (37,221-dwt, 2011) fixed at
delivery Gibraltar for a trip via USEC, redelivery India with coal at $7,500 Ningbo for a trip down to South East Asia with steels. In the
$16,500. In the Pacific, Key Evolution (83,416-dwt, 2010) fixed delivery South Pacific, Basic Challenger (36,936-dwt, 2014) and Indonesia to
retro Kandla 13th April for a trip via East Coast South America, Taiwan coal run at $7,000 Singapore and Crystalgate (28,183-dwt,
redelivery Singapore-Japan at $13,000. Ultrabulk fixed the Union Mariner 2010) fixed out of Cigading at $7,650 for a single timecharter with via
(81,964-dwt, 2013) delivery Huanghua for a trip via Vancouver, Australia redelivery Kuala Tanjung with a cargo of Alumina.
redelivery South China at $10,100.
Representative Dry Cargo Market Fixtures
Vessel DWT Built Delivery Date Redelivery Rate ($) Charterers Comment
KSL Sapporo 180,960 2014 Ljmuiden Spot Skaw-Cape Passero 14,950 Cargill Transatlantic RV
Hyundai Via WC
G.P. Zafirakis 179,492 2014 Baoshan 28-30 Apr Sing-Jpn 16,000
Glovis Australia
Maritime
95,712 2010 Qingdao 03-08 May Sing-Jpn 11,750 Rio Tinto Via Kwinana
Century
Via ECSA intn
Yarraonga 82,800 2008 Retro Haldia 17 Apr Sing-Jpn 13,000 CNR
grains
Via Indonesia int
Cetus 76,845 2003 CJK 01-04 May Japan 7,800 DAmico
coal
Yangtze 6 63,478 2014 Amsterdam PPT Sing-Jpn 17,500 Trafigura Via Continent
Densa Jaguar 57,637 2012 CJK SPOT India 9,000 Glencore Via Nopac
Harvest Plains 52,549 2001 ECSA Early May Skaw/Med 13,000 Oldendorff
Four Nabucco 34,403 2010 Alexandira PPT US Gulf 7,500 WBC
Dora Oldendorff 33,168 2010 River Plate PPT Algeria 13,000 Thorco Bulk

Exchange Rates This Week Last week

25,000
US$ per day

Capesize Panamax
JPY/USD 111.37 108.99
Supramax (58k) Handysize
20,000 USD/EUR 1.0933 1.0688

15,000
Brent Oil Price This Week Last week
10,000 US$/barrel 51.80 51.71

5,000 Bunker Prices ($/tonne) This week Last week

Singapore IFO 305.0 309.0
0
MDO 478.0 490.0
19-Nov-16

09-Dec-16

29-Dec-16

18-Jan-17

07-Feb-17

27-Feb-17

19-Mar-17
30-Oct-16

08-Apr-17

28-Apr-17

Rotterdam IFO 280.0 285.0

MDO 433.0 449.0
WEEKLY COMMENTARY
28 April 2017

Dry Bulk S&P

The merry jig of activity in the dry second hand market A price that follows the gains seen in the two STX sisters
continues this week with more traditional names dusting of Imperial & Libertas (75,527-dwt, 2007 STX) reported at
their dancing shoes and joining in the buying festivities. As a $27m enbloc a couple of weeks ago.
result we have a steady number of transactions to report.
Japanese owners Keishin Kaiun have sold the Double
The headline story is the five capes purchased by the Saverys Happiness (76,602-dwt, 2005 Imabari) in quiet deal for circa
family under their new listed vehicle Hunter Maritime $10m. Considering the Tianjin Pioneer (75,744-dwt, 2005
Acquisition. The vessels purchased being; Charlotte, Greta & Sanoyas) was sold earlier in the month for $11m, the
Tom Selmer (179,200-dwt, 2011 New Time), and the Hugo & undisclosed buyer on the Double Happiness (on paper) has
Lene Selmer (175,400-dwt, 2010 New Times). Four of the managed to secure a below market deal. Perhaps the
vessels have time charters attached until July 2017 & February transaction was concluded a few weeks ago?
2018. It is understood the deal remains on subjects at a price
In other news the Maritime Emerald (58,700-dwt, 2009
circa $139.4m enbloc. In other capesize news, the Giant Ace
Tsuneishi Cebu) has been sold for a firm $14.4m to an
(179,147-dwt, 2009 HHI) is reportedly sold for $28.3m to
undisclosed Greek interest. Taking into account the vessel
undisclosed buyers. The price is in line with last done Mount
is Cebu built the price represents a new bench market
Meru (179,000-dwt, 2009 Hyundai) sold last week for a
when compared to last weeks sale of the Kawasaki built
similar number, circa $28m.
Eressos Luck (55,400-dwt, 2009 Kawasaki) reported at
Economou continues to take in tonnage with another raid on $14.5m and the Honest Spring (55,641-dwt, 2008 Mitsui)
the United Ocean fleet. DryShips name is being put on the sold at the start of April for circa $12m.
United Splendour (82,129-dwt, 2014 Tsuneishi) sold for a
The majority of world has May Day and Labour Day
reported $23.75m. Its worth reminding ourselves the sister
holidays this coming Monday 1st May, however activity is
vessel United Prestige (81,918-dwt, 2014 Tsuneishi) was sold
certainly not set to wane. Numerous buyers are rumoured
back in early March for $22.m.
to be inspecting a broad range of dry bulk tonnage, and
The Santa Celia (77,171-dwt, 2009 Oshima) is rumoured sold vessels that wouldnt have been considered six months ago
to clients of Erasmus Shipinvest for $15.5m. due to their place of build are now attracting keen interest!

Reported Dry Bulk Sales

Vessel DWT Built Yard Gear Buyer Price $m Comment

Giant Ace 179,147 2009 HHI - Undisclosed 28.3
Hugo Selmer 175,401 2010
Lene Selmer 175,401 2010
Tom Selmer 175,219 2011 New Times - 139.4 Enbloc sale
Greta Selmer 175,181 2011
Charlotte Selmer 175,155 2011
Grain May 87,150 2013 Hudong - Diana Shipping 20.3 -
Soya May 87,146 2013 Hudong - Diana Shipping 20.1 -
United Splendour 82,129 2014 Tsuneishi - Dryships 23.75 -
Shanghai Jiangnan
SBI Cakewalk 81,129 2014 - Dryships 22.5
Changxing SB
Shanghai Jiangnan
SBI Charleston 81,128 2014 - Dryships 22.5
Changxing SB
Corona Dynamic 77,283 1998 Kawasaki - Middle Eastern 6.0
Clients of Erasmus
Santa Celia 77,171 2009 Oshima 15.5
Shipinvest
Double Happiness 76,602 2005 Imabari Undisclosed Circa 10.0 (Old sale?)
Newlead Victoria 75,966 2002 Tsuneishi - Australian 5.0
Orsolina Bottiglieri 75,413 2001 Hitachi Maizuru - Chinese 6.5
Giovanni Battista Bottiglieri 75,265 1999 Fincantieri Stabia - Chinese 4.4
Grazia Bottiglieri 75,265 1999 Fincantieri Stabia - Chinese 5.1
TTM Brulliance 75,000 2011 Penglai Zhongbai - Lavinia 12.5
Global F 73,729 1998 Sumitomo - Undisclosed 5.0
Maritime Emerald 58,731 2009 Tsuneishi Cebu - Greek interest 14.4
Four Kitakami 55,668 2009 Mitsui Tamano C 4x30 Undisclosed 14.9
Halla End & HI
Amira Nadia 45,916 1997 C 4x30 Undisclosed 3.7
Sambo
Lowlands Sky 32,280 2009 Kanda Kawajiri C 4x30.5 Janchart Shipping 9.2
Emanet 28,350 1996 Imabari C 4x30.5 Turkish 3.2
WEEKLY COMMENTARY
28 April 2017
Tanker Commentary

Following a great deal negative sentiment since the start
of the year concerning the demise of tanker asset
values, the market appears to have found a level
particularly in the product tanker space as opposed to
the crude market.
Following last weeks sale of the Italian controlled Nisida
and Miseno (51k dwt, 2012 STX) at somewhat
surprisingly firm levels, Vroon are now reported to
have disposed of two high spec MRs namely Iver
Example and Iver Express (46k dwt, 2007 HMD). The
IMO2 notation ships are reported to be sold in the mid
$16m each, basis delivery with SS/DD due with
unconfirmed reports that Union Maritime are the
buyer.
The sale falls in line with that achieved on the Bursa
(51,463-dwt, 2008 STX) sold at $17.4m which Great
Eastern have emerged as the buyer of. Vroon have
one further sister Iver Exact (46,575-dwt, 2007
Hyundai Mipo) which is likely to be sold shortly having
passed SS.
In the crude sector, a new benchmark has been set by
Gener8 with the sale of their aframaxes Gener8
Daphne and Gener8 Elektra (both 106,560-dwt, 2002
Tsuneishi). A deal is reported to have been concluded
at $10.5m which is a step down from the last
comparable sale of the Shin Ei (106,361-dwt, 2002
NKK) back in February at $11.25m. At the time of
going to press, a buyer is yet to be disclosed.

Reported Tanker Sales

Vessel DWT Built Yard Buyer Price $m Comment

Gener8 Daphne 106,548
2002 Tsuneishi Undisclosed 10.5 each
Gener8 Elektra 106,560
Iver Example 46,784
2007 HMD Unconfirmed Mid 16 each
Iver Express 46,858

Tanker Period Fixtures

Vessel DWT Built Yard Period Rate ($/pd) Charterer

Tirupati 149,258 1994 Fincantieri 1 year 13,000 Xedex
Captain John 114,810 2014 Hyundai Samho 1 year 16,000 Navig8
Captain Paris 113,876 2014 Hyundai Samho 1 year 16,000 Navig8
Captain Spiro 113,796 2014 Hyundai Samho 1 year 16,000 Navig8
King Philippos 111,827 2012 HHI 6 months 16,000 Navig8
Lady Henrietta 111,815 2012 HHI 6 months 16,000 Navig8
Blue Sky 105,491 2009 Sumitomo I year 16,250 ATC
DL Navig8 50,376 2008 SLS 1 year 12,000 ST Shipping

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