Harper Petersen & Co – Ship brokers since 1943
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Market Report

Container update 21st April, 2011


The 1st Quarter of 2011 has on average seen charter rate increases of about 30 pct according to our estimates. This increase, however, has not be uniform. One distinct feature of the market in 2011 so far, has been that different sizes, different regions have all moved independently of each other. We expect this to continue with high bunker prices making it extremely difficult for owner and operators to position ships to different regions. The high bunker prices are also the most important factor for operators when determining the suitability of certain types of ships. Fuel efficient ships have recorded significant premiums over less efficient competitors. 
 
A second distinctive feature of the container market in 2011 so far, is that most operators have reported declining freight rates. For example, The Shanghai Containerised Freight Index (SCFI) saw a decline of just over 10 pct during the 1st quarter. So whilst charter rates have increased, freight rates have declined. One possible explanation for this unusual relationship between charter rates and freight rates, is that operators have been building up market share at the expense of a current decline in freight rates, in the expectation of future freight rate increases. This expectation of higher freight rates is shown if one looks at the forward curve for freight derivatives for 2011. Currently Quarter 3 is priced at a 25 pct premium over current freight rates. Although this is an illiquid and immature market, there is a clear expectation that freight rates will increase during the upcoming months.
 
As highlighted above, different sizes and different ship types have moved independently of each other. The 4000-5000 teu sizes saw some of the greatest increases with the market moving up from levels around usd 21000 in January to around usd 28000 in March. Since the beginning of April this segment has seen some lower fixtures with a number of relets impacting upon the market. The last reported fixtures were for usd 27000 for 12 months and a 36 month deal rumoured around usd 25500. However, owners of tonnage in this segment remain fairly optimistic, reporting good demand for vessels in June and July.
 
The 2700-2800 teu sizes saw the greatest increaes during 2011, moving from around usd 12500 to a high of around usd 18000 for the very high specification ships. Similarly to the larger sizes, there is a feeling that in the short term the peak has been reached and it will be difficult to replicate these rates. The 2700 teu market has been boosted by a number of operators starting new services, particularly in the highly competitive Far East - USWC services. This segment has also seen the largest discrepancy between modern fuel efficient ships and the lesser specification ships. For example certain high specification 2800 teu ships were fixing at levels above usd 18000, similarly sized older inefficient ships were fixing in the usd 14000s. usd 4000 is a highly unusual differential, howvever, obviously justified when bunkers are costing usd 650 per mt.
 
The 1st Quarter has also seen the return of more newbuilding activity. In the 9000 -10000 teu sizes, Seaspan made a huge signal of intent with an order of 8-10 ships with further options. The 4600 teu sizes have also been in great demand, with Greek owners being particularly active. A number of operators have already fixed these "wide beam" designs for forward delivery proclaiming the beneficial fuel economy. 1700 teu ships are also in vogue with both 1700 teu Wenchong designs and new bangkok max designs being ordered. More interestingly is what is not being ordered. We see no reports of orders in the 2500-2800 teu sizes, nor any orders of ships of 1500 teu and below.
 
Please find a selection of fixtures from the 1st quarter.

 
 
 

FIXTURES

Gearless

CONTI ANPING´06 Hapag Lloyd
53682 dwat 4298 teu (2810 @ 14ts)
24kn on 133,6ts
36 mos
25000
   
NORTHERN DIVINITY´97 PIL
45210 dwat 3607 teu (2610 @ 14ts)
23kn on 122ts
12 mos
21000
   
LISA SCHULTE´06 OOCL HK
42183 dwat 3534 teu (2353 @ 14ts)
23,5kn on 122ts
12 mos
20500
   
HS HAYDN´10 Maersk
41989 dwat 3534 teu (2353 @ 14ts)
22,9kn on 128ts
36 mos
22750
   
MARE THRACIUM´97 CCNI
34710 dwat 2959 teu (2031 @ 14ts)
22kn on 82ts
12 mos
14800
   
BUXCROWN´89 Seacon
26288 dwat 1743 teu (1314 @ 14ts)
18,5kn on 49ts
5 mos
11000
   
KING BRIAN´08 Wan Hai Lines
24150 dwat 1706 teu (1250 @ 14ts)
19,5kn on 50ts
6 mos
11800
   
WILHELM E´95 Evergreen
20406 dwat 1468 teu (1034 @ 14ts)
18kn on 45,3ts
6 mos
10100
   
CAPE FERRO´03 YSC
16439 dwat 1200 teu (870 @ 14ts)
19kn on 41ts
6 mos
10250
   
TAMPA BAY´06 Seacon
13690 dwat 1118 teu (700 @ 14ts)
19,5kn on 41ts
6 mos
9000
   


Geared

ARTUS´07 CMA CGM
37125 dwat 2785 teu (2170 @ 14ts)
21,5kn on 89,5ts
12 mos
17400
   
NORDATLANTIC´03 Safmarine
33850 dwat 2478 teu (1912 @ 14ts)
22,8kn on 88ts
12 mos
14500
   
WEHR BILLE´02 NDAL
33650 dwat 2474 teu (1890 @ 14ts)
22kn on 74ts
10-12 mos
14000
   
SEVILLIA´08 Maersk
25899 dwat 1793 teu (1312 @ 14ts)
20,5kn on 60,4ts
12 mos
12200
   
STADT GERA´07 CMA CGM
18480 dwat 1296 teu (957 @ 14ts)
19,6kn on 45ts
6 mos
12400
   
MALTE RAMBOW´05 MCC
13760 dwat 1118 teu (700 @ 14ts)
19,6kn on 41ts
12 mos
9000
   

This report reflects information given in good faith to the best of our knowledge, but without guarantee.