Market Report

The 'spot' ship - a sight not seen for a while in the market has reemerged with a handful of vessels waiting for employment off Singapore. Looking at the recent developments and with the build up of this tonnage in Asia we believe that the market will remain under pressure until the end of the year unless demand noticeably increases.

It has been the 1700 TEU ships that have come under most pressure with rates coming down from about USD 18,500 for a period of 12 mos a few weeks ago to shorter term fixtures in the 14000s & 15000s depending on the specification for tonnage that was sitting prompt. We expect further pressure with limited new requirements expected. The rates in the smaller 1000 teu sizes have also come down, although at least there seems to be enough requirements to keep the vessels employed. Activity in the China / Japan / Korea feeder market has picked up a little compared to the summer months although freight rates
remain very low.

It has been fairly active in the 3000 TEU plus sizes with CMA CGM and MSC being the most active. CMA CGM was heard to conclude a number of panamax relets from other Liner Companies and MSC were also rumoured to fix relet tonnage (4 x 5500 TEU Newbuildings from CSAV) at 4 years at a rate around USD 31,750. Further forward, Hamburg Sued was active by taking 3 x 3500 TEU Newbuildings from B. Schulte with delivery in 2007 and 2008 at a competitive rate of USD 23,300. The 2800 TEU sizes were also active with a number of relet deals concluded.