Upward momentum in charter hires for 2,500–5,000 TEU segments. By Michael Hollmann
The rally in charter rates for container vessels was basically maintained during May until copy deadline of this issue of[ds_preview] HANSA. According to the New ConTex, period rates for vessels with intakes between 1,100 and 4,250TEU were up 4.0% month-on-month. However, looking at the market in total, the picture is more fragmented than it used to be, with some vessel types or regional markets suffering slight declines lately. Very large gearless ships are a case in point, illustrated by slightly weaker fixing levels of 20,000$/day for 8,500TEU class ships. Curiously, the situation is very much confined to ships of more than 7,500TEU capacity whereas the smaller »old« post-panamax classes of 5,500 to 7,000TEU are still seeing very brisk demand. As one German chartering broker emphasized: »There is nothing spot in that segment and plenty of orders still uncovered, so we expect the positive trend to continue.« Latest benchmark fixtures include a flexible short period for an older 6,700TEU unit at a respectable $18,500/d.
Probably the firmest of all size classes today is the traditional 4,000-5,100TEU panamax segment which up until last year was declared dead in the medium run. The »reprieve« these ships got seems to make more and more market participants believe that there is now a sustainable commercial future for this class again, seeing that there are basically no newbuildings coming up anymore. At the time of writing, the market was a abuzz with talk that a baby panamax may have breached the 13,000$/day-barrier in Asia. The rapid improvement in sentiment for this vessel type is well reflected by the 12-months period assessment for the 4,250TEU class by ConTex panel brokers. The value went up from around 10,700 to 12,300$ within just four weeks as per 17 May. Spot supply of charter vessels in the panamax class was down to just one or two vessels plus two units still in cold lay-up in southeast Asia. Confidence among shipowners in this segment is probably the strongest it has been within a decade, one broker explained. There is even a new Far East/North Europe loop operated by Hyundai with panamax ships against all the competition of 18,000+ TEU vessels.
Skimming reported fixtures over the past weeks, it becomes obvious that there is a broad base of demand for panamax ships worldwide. Fixed trades range from Far East-Australia via Intra-Asia and Far East-West Africa to West Coast South America-US East Coast and transpacific. Even if a new round of cascading takes place, it is unlikely to affect all these trades with their unique commercial and operational requirements in the same way.
The other very liquid charter segments with a continued rise in rate levels are the 2,700/2,800TEU gearless and 2,500TEU geared segments. Once the number of prompt units go up, there is a fresh round of fixtures and extensions that wipes out again all the availability, as brokers point out. Even calendar weeks punctuated by multiple bank holidays have seen more than half a dozen 2,700TEU ships fixing new employment. The strong momentum saw rate levels for the most popular German-built Aker and Thyssen designs surpass $12,000/d in Asia, with period durations lengthening to 6–12 months.
In the feeder and handy classes below 2,000TEU, developments were rather mixed. Standard geared 1,700TEU ships recorded a bit of a decline in demand, leading to higher tonnage availability and fixing levels softening in the mid and upper 10,000’s $/d. However, modern eco designs such as the geared SPP 1700 type regained some ground, fixing medium periods at $14,000/d.
In the 1,000/1,100TEU segment, the trend was sideways for traditional CV1100’s (8,000$) and firmer for other gearless 1,000TEU types such as the »Dae Sun«. Demand for feeder ships of 1,000TEU and below in Europe slowed down notably.
Michael Hollmann
