Market Report

On the charter market, the floor of around usd 4000 for the 1100 - 1700 teu, which we have previously mentioned, is still holding. 1100 teu ships have maintained this level for the previous month and 1700 teu fixtures are being concluded in the usd 4150 - 4300 range. This segment remains the most active.

There has been a little more activity this last week in the 2000 teu plus sizes. There have been some rumours of 2x 2800 teu ships fixing to a Japanese operator and there was an extension of the 2800 teu CARDONIA to OOCL at usd 5500 (some retroactive rate applied). Otherwise the activity has been limited to a few time charter trips ex Asia direction Arab Gulf or Med by IRISL and EMIRATES SHIPPING. Whereas a few months ago owners were unwilling to look at redelivery in the Arab Gulf, most are now willing to look at such terms. Otherwise ships in the 2000-2500 teu size continue to be fixed for trips with breakbulk cargo, particularly steel products ex N Cont direction India.

There was a revival in the SNP market this last month with a handful of 1990s 3000 teu plus built vessels sold to Greek owners from Japanese operators and German owners. With the vessels sold basically at scrap value plus a margin, these Greek owners are purely speculating on asset price increases in the coming few years.

Otherwise there was some positive news heard. The number of inactive ships was reported to have declined in June. Lloyds' MIU estimated the total number of inactive vessels to 536 units of 874,977 teu, compared with 576 ships of 1m teu in early June. However, with all Liner Companies optimising there own ships as much as possible, the ratio of third party owned ships continues to increase.

It was also reported by The European Liner Affairs Association that exports ex Europe had increased in May. Containerized exports ex Germany to Asia were heard to incrased by 5 pct compared to May 2008 and this was also replicated in The Netherlands and Spain. This was not however matched on the Asia - Europe leg with a 20 pct decline in May 2009 compared to the corresponding month in 2008.