Thursday, July 22, 2010
Monday, July 19, 2010
More about the current market
One of my students (VS dry cargo shipbroking cert) asked the following which I thought would make for good discussion
qte
Good to see the BDI is up.
Wanted to ask - To what level does sentiment play on freight rates? Like stocks, can a general consensus push or drag freight rates? i guess for ships there is a more tangable/physical element. but if all ows/ops expect mkt to rise and hold out for higher rates, would this not push up rates.
Yes, as with stocks sentiment is a huge factor in shipping especially in the short term (volatility). Over the long term (trends) then sentiment plays a part but fundamentals become more important. Many however, argue that all markets are about just about one thing "sentiment". Think about it - If you FEEL confident you may charter a period ship or build a ship. If you dont FEEL confident then vice versa. No one knows the future so in reality the forward price of something is just a combination of thoughts and feelings (from the market participants).
Read ur last post...if congestions can play such a big role: wont a certain aspect of an increased order book/tonnage be cancelled out by the result of this adding to congestion issues (given constant level of orders)?
(Not really because congestion is predominantly a demand side issue. More demand for coal and iron ore = more shipments = more congestion. Order books issues are supply side. Just because you have more NEW ships doesnt necessarily mean there will be more shipments especially if demand for commodities stays low. What may happen is that an oversupply of ships will leed to layups and scrapping)
Cheers,
VS
BTW we are more than half way through the 'VS dry cargo shipbroking and chartering certificate'. Many of you have expressed and interest to be in the next intake. I will be releasing details on how to enrol sometime in late August.
qte
Good to see the BDI is up.
Wanted to ask - To what level does sentiment play on freight rates? Like stocks, can a general consensus push or drag freight rates? i guess for ships there is a more tangable/physical element. but if all ows/ops expect mkt to rise and hold out for higher rates, would this not push up rates.
Yes, as with stocks sentiment is a huge factor in shipping especially in the short term (volatility). Over the long term (trends) then sentiment plays a part but fundamentals become more important. Many however, argue that all markets are about just about one thing "sentiment". Think about it - If you FEEL confident you may charter a period ship or build a ship. If you dont FEEL confident then vice versa. No one knows the future so in reality the forward price of something is just a combination of thoughts and feelings (from the market participants).
Read ur last post...if congestions can play such a big role: wont a certain aspect of an increased order book/tonnage be cancelled out by the result of this adding to congestion issues (given constant level of orders)?
(Not really because congestion is predominantly a demand side issue. More demand for coal and iron ore = more shipments = more congestion. Order books issues are supply side. Just because you have more NEW ships doesnt necessarily mean there will be more shipments especially if demand for commodities stays low. What may happen is that an oversupply of ships will leed to layups and scrapping)
Cheers,
VS
BTW we are more than half way through the 'VS dry cargo shipbroking and chartering certificate'. Many of you have expressed and interest to be in the next intake. I will be releasing details on how to enrol sometime in late August.
Sunday, July 18, 2010
The markets have tanked part 2
Excellent post made by a reader
quote
Anonymous has left a new comment on your post "The markets have tanked!":
I believe reduced congestion, particularly in Australia, earlier this month has also played a part.
"Newcastle's coal congestion in June had up to 61 ships waiting in queue.
The average waiting time for Newcastle's coal port, however, has improved. During the week of July 12, there were an average of 12 vessels waiting to load."
Data I've seen indicates Cape congestion down in the space of a week by 6Mdwt, consistent with the absurd reduction in Newcastle queues. That's equivalent to about 3 months worth of Cape deliveries in one swoop
Unqte
Yes this is an excellent point. Highlights a few things. Congestion has dropped dramatically in a relatively short period of time doesnt means that PORTS are any more efficient it means that there are less shipments being booked.
It also highlights the fact that the 'Markets' may have been so high for so long due in the main to something as inoccuous as 'Infrastructure issues'.
We like to think freight rate are determined by the solid and sensible issues such as the world demand for Steel, or the amount of ships available to charter BUT essentially a massive determinant has been that port infrastructure, or the lack of it, has meant that despite roaring demand, our land based logistical systems have not been able to keep up. I guess this isnt too surprising. Infrastructure projects, by their very nature take years to develop. Plus when you consider that many of the worlds ports (and all of its seaways) are not controlled by private enterprise - then you can see how a spike in demand does not always translate well on the supply side.
So is there any good news?
YES - after 35 odd days of downward movement the BDI has moved back into positive territory. The dramitic fall has tacken its toll and firms have already moved into defensive mode.
Suddenly there is talk of hire freezes, counterparty risk and dare I say it "Economy Class" travel. Batten down the hatches. I expect a steady rise in the BDI and to settle around the 2500 mark...
Good time to train up and prepare for the next market rise
Everything happens for a reason
Cheers
VS
quote
Anonymous has left a new comment on your post "The markets have tanked!":
I believe reduced congestion, particularly in Australia, earlier this month has also played a part.
"Newcastle's coal congestion in June had up to 61 ships waiting in queue.
The average waiting time for Newcastle's coal port, however, has improved. During the week of July 12, there were an average of 12 vessels waiting to load."
Data I've seen indicates Cape congestion down in the space of a week by 6Mdwt, consistent with the absurd reduction in Newcastle queues. That's equivalent to about 3 months worth of Cape deliveries in one swoop
Unqte
Yes this is an excellent point. Highlights a few things. Congestion has dropped dramatically in a relatively short period of time doesnt means that PORTS are any more efficient it means that there are less shipments being booked.
It also highlights the fact that the 'Markets' may have been so high for so long due in the main to something as inoccuous as 'Infrastructure issues'.
We like to think freight rate are determined by the solid and sensible issues such as the world demand for Steel, or the amount of ships available to charter BUT essentially a massive determinant has been that port infrastructure, or the lack of it, has meant that despite roaring demand, our land based logistical systems have not been able to keep up. I guess this isnt too surprising. Infrastructure projects, by their very nature take years to develop. Plus when you consider that many of the worlds ports (and all of its seaways) are not controlled by private enterprise - then you can see how a spike in demand does not always translate well on the supply side.
So is there any good news?
YES - after 35 odd days of downward movement the BDI has moved back into positive territory. The dramitic fall has tacken its toll and firms have already moved into defensive mode.
Suddenly there is talk of hire freezes, counterparty risk and dare I say it "Economy Class" travel. Batten down the hatches. I expect a steady rise in the BDI and to settle around the 2500 mark...
Good time to train up and prepare for the next market rise
Everything happens for a reason
Cheers
VS
Tuesday, July 13, 2010
Exciting new project
I have had numerous requests from people asking for more information about the 'actual markets'.
With that in mind, i'm working on a new project that will help readers better understand the different market segements. It will also help readers better identify the major palyers in each market segement. There may also be some crystal ball gazing looking at how these markets may play out over the next 12 months.
Keep an eye out
Cheers
VS
With that in mind, i'm working on a new project that will help readers better understand the different market segements. It will also help readers better identify the major palyers in each market segement. There may also be some crystal ball gazing looking at how these markets may play out over the next 12 months.
Keep an eye out
Cheers
VS
Thursday, July 8, 2010
The markets have tanked!
Yes the markets have dropped for 30 consecutive days. Check out the bdi index Here
The extended supply of new ships is starting to make a difference, China's steel industry is in go slow and maintenenace mode and the overall mood is a tad gloomy.
The good news is that we are still nowhere near the lows from 2 years ago and in truth the market now has renewed optimism that any drop no longer means catastrophe. Righty or wrongly scribes are still predicting a rebound in the 3rd and 4th Quarters.
I blame the workd cup. Too much watching not enough doing PEOPLE!
I also blame the great China Currency debate.
I blame to builders of ships. You guys are the only ones who should be sitting on your hands watching the football.
Finally I also blame George Bush - because, well.......... I just like blaming George Bush.
So keep your heads up. Im prediciting that by 2020 the markets will be double what they are now.
I also predicted that in 2010 an African Nation will win the world cup so take from that what you will.
Cheers
VS
The extended supply of new ships is starting to make a difference, China's steel industry is in go slow and maintenenace mode and the overall mood is a tad gloomy.
The good news is that we are still nowhere near the lows from 2 years ago and in truth the market now has renewed optimism that any drop no longer means catastrophe. Righty or wrongly scribes are still predicting a rebound in the 3rd and 4th Quarters.
I blame the workd cup. Too much watching not enough doing PEOPLE!
I also blame the great China Currency debate.
I blame to builders of ships. You guys are the only ones who should be sitting on your hands watching the football.
Finally I also blame George Bush - because, well.......... I just like blaming George Bush.
So keep your heads up. Im prediciting that by 2020 the markets will be double what they are now.
I also predicted that in 2010 an African Nation will win the world cup so take from that what you will.
Cheers
VS
Shipbroker Resume's and Cover Letters
Over the last 12 months I have enjoyed helping out many of you with getting your resumes and cover letters right. Apart from having these two things in perfect working order it is also essential you have a plan of attack. No point in sending out emails in cyberspace hoping and praying for a reply.
Anyway...with all the requests I have (coupled with all my other commitments) I need to be a little more time savvy so that i can reply to those who really need my help. So from now on for those of you wanting help with resume's, letters and a plan of attack I will be asking that you make a donation of USD 20.00 by pressing the donation button at the bottom right hand corner of the blog. That will then allow me to prioritise my time in a more efficient manner and help out those who really do need some assistance getting this important facet right. I once paid someone 75 bucks for the same privilege so its still a good deal.
Thanks for your understanding.
VS
Anyway...with all the requests I have (coupled with all my other commitments) I need to be a little more time savvy so that i can reply to those who really need my help. So from now on for those of you wanting help with resume's, letters and a plan of attack I will be asking that you make a donation of USD 20.00 by pressing the donation button at the bottom right hand corner of the blog. That will then allow me to prioritise my time in a more efficient manner and help out those who really do need some assistance getting this important facet right. I once paid someone 75 bucks for the same privilege so its still a good deal.
Thanks for your understanding.
VS
Wednesday, July 7, 2010
Travel and Shipbroking
This message gets it own posting for two reasons. Firstly its a good question and secondly the poster has said something nice about my blog. That will do it everytime...
Qte
Anonymous has left a new comment on your post "Why Shipbroking":
Hi Virtual Shipbroker
I am not going to sound very original based on the comments that I read but anyway I'd like to congratulate you on your blog which is very well written and even a bit captivating. I can't really remember how i ended up here but I've stayed much longer that I usually do on such websites. I don't know if it's the casual but insightful way you write or the feeling i had that all my questions were answered before I can clearly formulate them in my mind, but there is something which makes this site difficult to leave.
However there was one question that I asked myself and that I havn't seen yet (well I havn t read aaaaaalll the posts on the other hand but well..): I for one am lucky enough on the money front, my job pays well and is even kind of exciting to some extent, so among the good points that you listed about shipbroking the one that struck me was travel (ranked 2nd in the list!). Because that's what i m missing in my job! but as a shipbroker why, when and where do you travel?? for how long? is it kind of adventurous, do you go to original places, or is it just the usual business trip?
This is what would make a difference with most jobs in my humble opinion.
Thanks in advance and keep on the good work :)
Clement
Unqte
Well Clement first let me say thank you for your perceptive comments about said blog. Truth is I try and make it captivating by including interesting topics. And yes I have only recently realised that I write in an informal yet informative style that people seem to enjoy. So I’m running with it...
Travel is an important part of a chartering executives’ job. I reckon I travelled around 8 weeks per year when first starting out. I’m a little jaded these days and it takes something special to get me moving. Something special is a close client, a million dollar deal (commission wise) or an exotic destination.
Mostly be expected to travel regularly for conferences (shipping and commodity), to geographical regions to market your services, occasionally to a ship loading or discharging and if you are lucky to when a "new ship" is being launched. If you are really fortunate they may even name the ship after your good self (or your better half). All ships are feminine remember (referred to as she). I think the names of quite a few mistresses also adorn the hulls of certain huge bulk ships.
Once you create a name for yourself expect to be invited to 'social events' that will require business class travel. Anyone for skiing in Canada, fishing in New Zealand, Horse racing in the Middle East, getting smashed in Vegas, Rugby in Hong Kong, Formula One in Mongolia....I mean Monaco?
Where ever there is a world event expect to find shipping people hogging some of the collective limelight.
Who I wonder is at the world cup....
Cheers
VS
Qte
Anonymous has left a new comment on your post "Why Shipbroking":
Hi Virtual Shipbroker
I am not going to sound very original based on the comments that I read but anyway I'd like to congratulate you on your blog which is very well written and even a bit captivating. I can't really remember how i ended up here but I've stayed much longer that I usually do on such websites. I don't know if it's the casual but insightful way you write or the feeling i had that all my questions were answered before I can clearly formulate them in my mind, but there is something which makes this site difficult to leave.
However there was one question that I asked myself and that I havn't seen yet (well I havn t read aaaaaalll the posts on the other hand but well..): I for one am lucky enough on the money front, my job pays well and is even kind of exciting to some extent, so among the good points that you listed about shipbroking the one that struck me was travel (ranked 2nd in the list!). Because that's what i m missing in my job! but as a shipbroker why, when and where do you travel?? for how long? is it kind of adventurous, do you go to original places, or is it just the usual business trip?
This is what would make a difference with most jobs in my humble opinion.
Thanks in advance and keep on the good work :)
Clement
Unqte
Well Clement first let me say thank you for your perceptive comments about said blog. Truth is I try and make it captivating by including interesting topics. And yes I have only recently realised that I write in an informal yet informative style that people seem to enjoy. So I’m running with it...
Travel is an important part of a chartering executives’ job. I reckon I travelled around 8 weeks per year when first starting out. I’m a little jaded these days and it takes something special to get me moving. Something special is a close client, a million dollar deal (commission wise) or an exotic destination.
Mostly be expected to travel regularly for conferences (shipping and commodity), to geographical regions to market your services, occasionally to a ship loading or discharging and if you are lucky to when a "new ship" is being launched. If you are really fortunate they may even name the ship after your good self (or your better half). All ships are feminine remember (referred to as she). I think the names of quite a few mistresses also adorn the hulls of certain huge bulk ships.
Once you create a name for yourself expect to be invited to 'social events' that will require business class travel. Anyone for skiing in Canada, fishing in New Zealand, Horse racing in the Middle East, getting smashed in Vegas, Rugby in Hong Kong, Formula One in Mongolia....I mean Monaco?
Where ever there is a world event expect to find shipping people hogging some of the collective limelight.
Who I wonder is at the world cup....
Cheers
VS
Tuesday, July 6, 2010
World Cup
I see that l'Orange is the new black!
Imo not as great as some of the recent dutch teams. No Davids, Van basten, Gullits etc
Total futball it isnt but maybe thats a good thing - It is afterall about winning. Look at Italy and some of the German teams over the years. Not exciting but they win..
Having said that - the Germans are playing incredible attractive football which is a pleasant change. To score 4 goals against three good teams is a huge effort.
It seems to me that the underachievers are Serbia. The first team to beat Germany ever in the first round of a world cup final campaign. Full of young (and old) stars Serbia is a great team. Lets hope that in four years time they can go further.
Great to see the USA do well. Lots of guys playing good football in top European Leagues.
Also impressed by Japan.
England, Italy and France....one to forget!
My pick for the final....Netherlands over Spain 3-2.
(Im often wrong but its good to have a guess)
VS
(football tragic)
Imo not as great as some of the recent dutch teams. No Davids, Van basten, Gullits etc
Total futball it isnt but maybe thats a good thing - It is afterall about winning. Look at Italy and some of the German teams over the years. Not exciting but they win..
Having said that - the Germans are playing incredible attractive football which is a pleasant change. To score 4 goals against three good teams is a huge effort.
It seems to me that the underachievers are Serbia. The first team to beat Germany ever in the first round of a world cup final campaign. Full of young (and old) stars Serbia is a great team. Lets hope that in four years time they can go further.
Great to see the USA do well. Lots of guys playing good football in top European Leagues.
Also impressed by Japan.
England, Italy and France....one to forget!
My pick for the final....Netherlands over Spain 3-2.
(Im often wrong but its good to have a guess)
VS
(football tragic)
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