Coronavirus and IMO2020 cause Baltic Dry Index to crash
The Baltic Dry Index has dropped to its lowest point in four years time as a result of the coronavirus, IMO 2020 and seasonality. The index currently stands at 487 points, down more than 1,100 points in comparison with the beginning of December last year.
The last time the Baltic Dry Index dove below 500 points was in February 2016, arguably the toughest year for shipping since the start of the millennium. The Baltic Cape Index for Capesize dry bulk vessels was down to just one index point on January 30th.
“IMO 2020 takes it toll, alongside the coronavirus and seasonality”, comments BIMCO’s chief shipping analyst Peter Sand on Twitter. “Ships with scrubbers are capable of running an almost profitable freight rate, but since the Baltic Dry index considers only ships without a scrubber, high fuel costs are really bringing down index readings and Time Charter Equivalents”, he adds.
— Peter Sand (@BIMCO_PS) January 30, 2020
Capesize slumps to record low as IMO oil rules | “Ships with a scrubber are capable of running an almost profitable freight rate, but since the Baltic considers only ships without a scrubber, high fuel costs are really bringing down index readings and TCE” https://t.co/dteGihCnZ8
— Peter Sand (@BIMCO_PS) January 31, 2020
Steel and metals
The multipurpose shipping industry will also be impacted as steel volumes, an important base cargo for project carriers, will likely be affected too. On one hand, steel production will suffer from the extended Lunar New Year break in China, while on the other hand, the iron ore supply to the mills could be disrupted by slower port operations. According to S&P Platts, mills relying on trucks for their supplies have already said they may face raw materials shortages by the second half of February.
The emergence of the virus during the Chinese holidays could prove to be a silver lining “as seasonally slow demand in China may absorb much of its downside impact on the metals markets”, states S&P Platts. Nonetheless, the analyst firm says “it is already certain to result in a weaker-than-usual first quarter.”
Fuel prices take a massive nosedive
Fuel prices have taken a massive nosedive since the beginning of the year with low sulphur fuel prices in Singapore dropping from USD 734 per tonne on January 1st to USD 415 per tonne today. The price drop comes at a good time as the transport and logistics industry is struggling with low demand as… Read more ›
Zeamarine closes offices in Denmark
Zeamarine is closing its operations in Denmark. The Danish subsidiary has filed for bankruptcy resulting in the closure of two offices and 23 employees being sent home, confirms local liquidator Hafnia Law. The German breakbulk carrier has two offices in Denmark, one in Naevsted and one in Aarhus, but both offices have now been closed… Read more ›
Manager loses contact with general cargo vessel after pirate attack
Chinese vessel manager Tianjin Xinhai International Ship Management has lost contact with its general cargo vessel Huanghai Glory after the vessel sent a piracy alert using its Ship Security Alert System (SSAS). An unknown number of pirates are believed to have boarded the vessel, which is currently drifting off the coast of Nigeria. The vessel’s… Read more ›