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A succession of holiday periods, plus continuing economic and financial problems in Asia, did not give the market a chance to gain any real momentum in January. Although some business was concluded in Asia and new requirements for March-May were under discussion with charterers from that region, owners still feared that overall the volume of business may be reduced in that area. As a consequence, some owners were keen to position their tonnage into the Atlantic at the next best opportunity.

By numbers, the orders quoted in January 1998 exceeded the previous month by about one-third. There were also more commitments of six, and up to, 12 months and longer, as well as forward fixtures and extensions, all hopeful indicators of further development.

Nevertheless, existing firm demand was unable to reduce visibly the number of spot/prompt, or 'within-the-next-10-days' vessels of 1,000TEU and upwards. As a result, in January rates achieved by charterers were reduced in some sizes. There were no period orders quoted at all in the container trades for conbulkers of over 30,000dwt, but good multipurpose tonnage and vessels with larger TEU intakes saw firmer interest. New in January was that prompt geared tonnage, although still rated considerably higher, equalled (in number) prompt gearless ships.

Signals by the Grand Alliance of its intention to redeliver time-chartered tonnage, rather than extend it, leads one to conclude that after the reforming of schedules, there will be little hope of immediate fresh requirements in the larger sizes of vessels. Similarly, the New World Alliance (ex Global Alliance) has not indicated so far any additional requirements.

For feeder tonnage of below (say) 1,000TEU, extra seasonal demand has ended. In Asian trades and within the Caribbean, interest has undoubtedly slowed, although owners were still maintaining a certain degree of confidence that the reduced volume of newbuildings in the recent past in this category has more or less restored a balanced supply/demand situation. Consequently, these owners were putting up a firm defence against attempts to further reduce rates. Much, however, will depend upon the final decision of the consortia and alliances about the structure of their feeder networks. A further firming of rates for fitted mini-bulkers in conventional trades has had a positive effect on equivalent feeder ship sizes.

Several gearless ships of 2,000 to 3,500 nominal TEU were fixed, although all were for interim periods of upto four months with further options, where charterers were able to obtain the same. The market for geared ships of 1,200 to 1,650TEU x 14 tonnes homogeneous varied. For example, a vessel of 1,600TEU x 14-tonne ran spot in Europe, although similar sizes were extended at practically the same rate levels as were paid a year ago. Gearless tonnage in this segment had not recovered and demand was limited.

Considerable pressure continued on geared tonnage of 1,000 to 1,200TEU x 14-tonne, to which owners reacted with great flexibility by positioning ships for period cover. For gearless tonnage in this size, demand remained altogether inadequate and there were few positive impulses in sight.

The offer of modern geared tonnage in the 800 to 999TEU size was not plentiful, yet charterers seemed to expect further reductions and the long anticipated firming of rates in this segment was certainly not realised at the time of this report.

Many ships of 500 to 800TEU x 14-tonne were employed in Asian services, where the modest demand presently being shown will most probably lead to further rate reductions, unless owners opt for the costly alternative of repositioning.

In the 350 to 500TEU size range, there were very few requirements for geared ships. Indeed, one could speak of a slight over-supply. Similar conditions prevailed for gearless tonnage in this size range, but prevailing rates were maintained and premiums were paid for tonnage flagged in an EU country and ice-class.

Activity for geared ships of 200 to 350TEU consisted almost entirely of extensions at slightly reduced levels. For gearless tonnage, many orders were quoted, but actual transactions were restricted mainly to opted extensions. Due to a lack of new period business, geared tonnage up to 200TEU had to live mainly off trips and, despite a good number of period enquiries, no period conclusions were reported.

In the multipurpose/tweendeck vessel market, the situation varied from a surplus of tonnage in the smaller sizes to increased fixing activities for modern, larger capacity ships. A modern Neptun-type settled at US$6,200/day for four/four months' transatlantic trading and US$6,750/day was paid for a Monsun-type for a period of six/six months. Two similar 605TEU ships of 15,000 to 16,000dwt, one with derricks, one craned, but both able to lift 90 tonnes, were extended for 12 months Continent/West and South Africa trading at US$6,500/day. This represented a drop of just over 10% compared to a year ago.

A 19-knot, 1,200TEU tweendeck was fixed for an Asia/West Africa round voyage and further interest in this vessel was registered because of the ship's speed. Four modern Neptun-900s found new homes at above the US$8,000/day mark for six to eight-month periods in the Mediterranean/US Gulf trade and, respectively for 12 months' trading between Australia and Papua New Guinea.

Unfortunately, the conbulker sector did not experience any increase in activity and there seemed to be little hope of an immediate improvement.

The sale and purchase market started very slowly in January and remained so until after the Lunar New Year holidays. On the secondhand market, prices were under further pressure.

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