As we are heading into Q4 our thoughts go back to the strong days during the end of last year. In spite of a recent strong return of Chinese iron ore imports, history is unlikely to repeat itself. Freight rates have been on the slide since mid-Summer and only Capes have resisted consistent erosion.

We are moving into a new era with the arrival of true “e-Navigation”, the first manifestation of which is the electronic chart. And as with every other advance in navigation since the arrival of radar, the benefits of the new bring with them cautions and caveats which must be considered if we are not to see a rash of “ECDIS assisted” incidents.

A growing number of influential interests are getting behind the proposals that would eventually see a degree of certainty over the weight of containers, an issue that has been something of a scandal for many years. With a worrying list of incidents in which the weight of containers has been found to have prejudiced the safety or stability of ships, the International Maritime Organization’s sub-committee on Dangerous Goods, Solid Cargoes and Containers has been asked to prescribe a mandatory solution at its next meeting this September.

By Maria Bertzeletou - Golden Destiny

The worrying downside risks of the dry bulk segment are implied by the constant fall of the BDI, the vigorous slump of iron ore price and the slackening Chinese economic growth. Australian iron ore mining company Fortescue Metals Group downsized its expansion plans for next year by more than 25% for 2013 against its original plan to extend its production capacity to 155m tones per year by June 2013.

All stakeholders in shipping realize that the business is cyclical, and the most important challenge is to predict the ups and downs and plan accordingly. But few had in the wildest fantasies predicted the financial crisis that hit the world 4 years ago and the significant drop in cargo volumes and the major impact this had on all shipping markets. The banker calls it a “black swan” but was it really? In this article we have tried to reflect on the four years that have passed and the immediate outlook for the coming years.

By Maria Bertzeletou - Golden Destiny

The summer season nears its end with freight markets being on a downward trend, dry and tanker segments are not showing signs of relief andcontainers continue to perform better than last year, while Euro zone recession threatens the volume of China exports to Europe and impedes a full market turnaround of boxship freight rates. Asset prices of secondhand and newbuilding assets are still presenting downward revisions stemmed from the disappointing freight market environment, while the question is which investment type is a profitable option for a shipowner given the current uncertainty in the freight market environment, as vessels’ oversupply and weaker Chinese economic outlook brings serious worries for the rest of the year and the forthcoming 2013.

Low global growth in oil demand combined with constant growth in the world fleet continues to impact market conditions negatively. BIMCO expects that average earnings in the VLCC segment will keep owners on the rack, as they are unlikely to escape the agonising lows around USD 2,000-15,000 per day.

The dry market plunged to new lows with Chinese economy distressing seriously the freight market environment and investors waiting for a new downward correction in asset prices following the tremendous fall of vessel earnings. China’s golden years” are gone as economic growth at the world’s second-biggest economy slows, said an official at Vale SA (VALE5), the top iron-ore producer.

As GDP growth slows down in China and India, so does demand for dry bulk shipping. Focus on handling the supply side challenge remains top of the agenda, including demolition activity that stays strong. Demand: The Summer lull in the freight market is soon to be over as we enter into the seasonally-stronger final five months of the year. Hopefully, this will bring around higher earnings, but the outlook is unlikely to support a joyride similar to that of last year. The Baltic Dry Index (BDI) currently stands at 843 (August 6), a level which is 53% below the average of the final five months of 2011.