No change
and
Wont change for at least 2 years.
On the supply side - the good news is that new orders (for new ships) have dried up completely and scrappings (of old ships) will continue nicely. So I reckon 2018-2019 we might see an upturn.
BUT like every other market report for the last 15 years the direction and speed of the market all depends on 'China' - well mostly anyway...
See don't bother paying Clarksons or SSY thousands for market reports...send me the cheque..
Virtual Shipbroker
Blue Sheep Way
8,000 meters
Bhutan
Hi VS - we are often required to come up with a forecast for freight rates in our line of work. I have seen that newbuild rates are usually more stable than 5 year TC rates, so the way I approach this exercise is taking an average new build rate from the previous 2-3 years, build in a 2 year construction period, and try to plug in a number for the TC rate from year 3 to year 18 (15 year life) that'll give a 10% IRR to the shipowner. A straightforward calculation in excel. Additionally, I assume a 15-25% scrap value for the ship.
ReplyDeleteI ran these numbers a few days ago for 74k dwt Panamaxes, and was getting 11k USD per day as a 'stable' TC rate. Does this look reasonble to you?