We are extremely grateful to our Clients for their trust & support. We have shipped over 600 000 tons of cargoes in 2016. THANK YOU VERY MUCH!
A thrilling new year has just commenced for ‘AESA Chartering’!
Not only because we are going celebrate the 5th anniversary of the company, but also we will be moving our main office from French Alps to the French Atlantic coast, close to the ports of Nantes, Saint-Nazaire & Montoir. Also, we shall announce soon the establishment of our new chartering office in Istanbul, leaded by ‘Erdinc Bektas’ having 30 years of experience in fixing ships and a true expert of Black Sea & Mediterranean freight markets.
Looking back to 2016, it is important to underline a few facts concerning the freight markets. Without exception, all Dry Indexes (Capes, Panamaxes, Supramaxes & Handies) rise from multiyear lows to multiyear highs.
Capesize Index finished the year at slightly over 1 000, doubling its value compared to January 2016 (below 500). Between September & November spot rates were flirting with levels not seen since late 2014.
Panamaxes followed a slow but steady upward trend for the entirety of 2016 that saw the final three months of the year bring freights to levels not seen since 2010.
Supramax index peaked at 972 in Mid-December, the highest since two years and even rivalling Panamax rates.
Handysizes had a year of unending improvement as the BHSI went from 200 levels to triple over the course of the year to surpass 600 by the end of it. The year ended with high sentiment due to the continued attractiveness for the small bulkers.
Short Sea trade, 2016 was again a year of survival for Owners. It wasn’t until November that the traditional Q4 upturn finally
materialized. Grain demand from Black Sea helped prop up the freight rates also in Mediterranean. Growing backlog cargoes from Egypt & Morocco led to a tight tonnage supply and rates has been shooting to levels that could hardly be imagined with short notice. We can consider that the year-end surge of the cargo demand has even put the Owners on the driving seat but only for few weeks. However the degree of ‘improvement’ is obviously relative to the starting point. The end of year holidays brought an inevitable slowdown and over the last couple of weeks the demand faded.
Will this Euphoria prove to be premature, or is there a room for cautious optimism for Owners?
One big reason for the increasing freight rates on large bulkers is that the world bulk carrier fleet is showing signs of stabilizing and coming into synchronization with cargo demand for the first time in years. More the rates will continue to rise on larger bulkers more there will be demand for smaller vessels. Interest rates across Europe are slightly increasing. EU Sanctions against Russia proved to be inefficient and the Europeans began to understand that they are penalizing their own economies. The tension between Russia & Turkey is over and it looks Putin & Erdogan became best friends again. Hopefully Syria will end up with a kind of stabilization (not in a manner that many had hope for, but still,) after 6 years of a desolating civil war, there is a ruined country left behind that needs to be rebuilt, which will provide a huge uplift to short sea trade in East Med. Libya commenced importing and we see more and more cargoes being shipped to Libyan ports. Egypt has been extremely active both for imports & exports. If there are no political uncertainties Algeria may increase the importation of construction steels, cement & timber. Increasing demand in above named countries will give a new occasion for European producers to increase up their productions.
In conclusion, I think the price of oversupplied tonnage against cargo demand has been heavily paid by Owners over the passing years with companies such as ‘Flinter’ & ‘Abis Shipping’ among others disappearing from the business. The 2016 has finished in better shape than it started, which is encouraging and I think there is room for cautious optimism. Owners may hope to see slowly increasing freight rates in 2017.
I wish you all the very best in this New Year.
Eren Bektas