The impact of reduced volumes from China and weakening demand forecasts from the US and Europe is cooling the hot containership charter market, with brokers talking of a correction.
A broker contact said the charging star today, new open tonnage applications were down to a trickle and some owners who had played the lucrative spot market were getting “a little nervous”.
“The charter rates for the small sizes are falling and that will eventually trickle down to the larger ships,” he said.
“Some of our owners have asked us to look at longer periods rather than chase one-off events lasting a few months, but we are finding that some charterers are now thinking twice before committing to long charters against bearish fundamentals,” he added. .
Alphaliner said this week that the smaller containership charter market was “witnessing a correction”, with new fittings in the feedermax and handy sectors trending below recent charters made, albeit still with high daily charter rates. .
The consultant said that illustrative of this was the fixture with CMA CGM of 1,368 teu eagle 11, that the carrier has taken for eight to 10 months in the Atlantic at $36,000 a day, significantly down from the $62,000 a day achieved by a similar vessel in February.
And in the feedermax sector, CV 1100-type ships were stretched for 12-month periods at around $30,000 a day: “Until recently, this tonnage could be pegged in the region of $40,000 a day,” Alphaliner said.
“24-month deals have also seen declining figures, with commitments now being concluded at $24,000 a day, down from the $30,000 available not long ago,” he added.
“Meanwhile, fuel-efficient ships are being eyed in the high $30,000 for 12-month contracts, also significantly below previous levels,” the consultant said.
The correction in the small sector containership charter market will be good news for feeder operators under pressure from owners to commit to longer periods at much higher rates, or risk losing tonnage to carriers. cash-rich, either by charter or through a sale.
The easing of rates in the charter market will, in due course, trickle down to the value of ships’ assets and may deter carriers from continuing to suck up tonnage at any price.
However, weaker fundamentals do not appear to deter MSC from its aggressive forays into the S&P containership market. Alphaliner reported three purchases of small container ships by MSC in recent weeks, bringing the carrier’s second-hand tonnage buying spree to nearly 200 vessels in less than two years.
These purchases have enabled MSC to overtake 2m partner Maersk in capacity rankings with a fleet of 4.35m TEUs, compared to the Danish line’s 4.2m TEUs.
Furthermore, MSC’s order book of 1.4 million TEUs is also substantially larger than its alliance partner’s 319,000 TEUs.