While the largest sectors of the boxship charter market get under pressure, rate levels for small and midsize vessels remain very robust.
The final quarter of the year has begun and the container ship charter market still looks pretty stable despite slowing[ds_preview] cargo traffic on the major west/west routes. Apparently global trade caught up with prolonged fleet overcapacity this year, providing for a more stable market foundation than in recent years. Global port throughput is now expected to exceed 6.0% this year, thus outpacing expected fleet growth of just under 5.0%. No wonder then, that the idle container ship fleet (charter-free tonnage + inactive liner-controlled vessels) remained at a relatively meagre 395,000 or 1.9% of the global fleet at the start of October, according to Alphaliner.
The pressure of slack capacity so far is mainly just felt in the largest charter vessel sectors of 5,500-6,500 TEU and 8,500 TEU where a number of units ran into spot/prompt positions, allowing charterers to beat hire rates down by a few thousand dollars from levels during September in some cases. CMA CGM was able to pick up the ‘GSL Tianjin’, coming off an OOCL charter, at just 13,000 $/day for 3-8 months, while some 5,500-6,000 TEU ships got fixed at similar levels following a previous benchmark of 15,000 $/day set in September.
Classical panamaxes were under pressure, too, in the first half of October, with the ConTex panel of the Hamburg Shipbrokers’ Association rating 24-month and 12-month periods 4.0% and 3.4% weaker than 4 weeks earlier. However, tonnage demand from operators rebounded during calendar week 42 when a bunch of vessels disappeared for short and medium term employments at ratel levels ranging from upper 7,000’s to high 8,000’s $/day. The higher rates tended to be available in the Atlantic where Hapag-Lloyd reportedly extended a trio of 4,800 TEU ships at 8,800 $/day for 4-8 months trading between the Mediterranean and North America. Elsewhere, Offen Group was reported to have agreed a 3-6 months extension for the 4,255 TEU CPO Baltimore at 8,450 $/day to Cosco for its North Europe/Mediterranean service. By contrast, in the Pacific the 4,300 TEU Schubert accepted 7,600 $/day for 4-10 months in the Far East/Australia trade with CMA CGM/ANL.Traditional sub-panamax type vessels continued to be in high demand, with rate levels for gearless 2,800 TEU ships stable at around 9,000 $/day or higher in Asia and finally ticking up a bit in the Atlantic/Mediterranean. Rate levels there nudged up from mid/upper 7,000’s to 8,000 $/day as highlighted by the extension of the 2,824 ‘Satje’ to Hapag-Lloyd. Geared 2,500 TEU types recorded a slight increase in average period rates by 1.3-1.6% month-on-month, according to the ConTex panel.
Market conditions in the sub-2,000 TEU sectors firmed up notably in some areas. Brisk demand for geared 1,700 TEU ships across Asia saw period rates rise by circa 5% month-on-month, according to the ConTex, as prompt availability in the east fell to just 3 ships in mid-October.
The feeder markets turned busier especially in North Europe, the Mediterranean and the Caribbean. With the approaching ice season, charterers in North Europe agreed significantly firmer rates for longer periods into next year. In the Mediterranean, market rates for ships around 1,000/1,100 TEU reportedly improved by circa 10% compared with September.
Michael Hollmann
