Markets at a glance
Newbuilding market — Continued larger orders from the giants; CMA CGM are confirmed to have ordered 8 methanol-DF vessels as they pursue their green targets and Qatar Energy moves forward with the next phase of its LNG carrier mega-project. In the dry bulk sector Tsuneishi bags several methanol fuelled Kamsarmaxes while tankers contracting has a very quiet week.
Secondhand market — The dry bulk sector returned to a upward trend in terms of vol-ume of transactions, with all size segments seemingly picking up their pace at this point. Asset price levels have incrementally taken a positive stance as well. On the other hand, quietness prevails in the tanker sector for the time being, unable to find any form of support.
Ship recycling market — Container vessels continue to head to breakers yards with the ‘MSC Jasmine’ the latest such sale. With four tanker sales reported, last week marked one of the busiest this year for the sector in a year which has seen just a quarter of the tanker recycling sales in 2022. The Indian market looks sure-footed while breakers in Pakistan seem to have momentarily run out of steam for their comeback, and Bangladeshi breakers prove to be unable to offer competitive prices.
Freight market
Dry bulk
Capesize – It was a week with some fluctuations in the dry bulk sector, with the BDI though, posting a modest 6.78% gain on a week-on-week basis. Within the Capesize segment, in both the Atlantic and the Pacific basins, things mostly moved in a positive direction until the middle of the week, until the end when we noticed some corrections. With the Capesize TCE Figure climbing above the US$ 20,000/day mark, period rates reflected this and experienced a positive boost too.
Panamax – Things did not shift considerably in the Panamax market, with the respective TCE still moving further into US$ 15,000/day territory. The market did find some sort of support from the Atlantic region, while the Pacific one appeared rather sluggish, amidst the holiday period.
Supramax – Spot earnings receded across all major routes of the Supramax size segment. The declining cargo availability across some key areas picked up the overall pace within the market. Finally, on Friday, the BSI-TCE closed at $ 14,041/day, reflecting a decline of 5.8% on week-on-week basis.
Handysize – The pace of upward mobility in the Handysize market has slowed down as of late, with some trade regions hampering this prolonged trend. On the brighter side, BHSI-TCE experienced a marginal growth week-on-week.
Tanker
VLCC – The recent upward momentum evaporated fairly quickly, with the bigger size segment indicating yet again signs of negative pressure. As a mere reflection, the respective TCE rate took a downward dive, noting losses of 24.8% week-on-week. As sentiment is far from robust, it won’t be surprising to experience pressure in period freight figures in the near term as well.
Suezmax – A rather uninspiring week took place in the Suezmax size segment, with its TCE figure posting on Friday an uptick of just 1% w-o-w. Across the main trade regions though, we noticed some mixed signals. Given the current state in West Africa, any firm footing to be seen in the market seems fairly distant at this point.
Aframax – Another positive round for the Aframax market took place, with its benchmark TCE value growing by 8.3% as of the past week. Rather in line with this, things moved on the positive side across most of the main trade regions, with the Caribs-USG route really picking up the pace at this point. Notwithstanding this, the Med trade hampered the general positive trend, having posted a rough 20% decline week-on-week.
MR — The opposite momentum between Atlantic and Pacific basin resumed for yet another week, with the former continuing on a recovery mode, having succeeded in further tightening the spread in earning figures between the two of them.
Sale and purchase
Newbuilding orders
Apart from the confirmation of CMA CGM’s order for 8 methanol-DF vessels (reported week 25) and the onset of phase 2 of Qatar Energy’s gas carrier ordering (17 pre-reserved LNG slots at HHI for $3.9bn), contracting was focused within the dry bulk sector. Tsuneishi has received orders for 2 methanol DF Kamsarmax vessels for around US$ 46m p/v on behalf of Diana Shipping, while it has been rumoured that Safe Bulkers has recently placed a similar order for US$ 45m p/v, with all four vessels to be constructed at the Zhoushan yard. Tsuneishi remains an important builder for this size segment and has around 25 vessels Kamsarmax vessels on order, with an increasing focus on methanol-fuelled vessels, such as its Mitsui and J Lauritzen orders earlier this year.
In general, Kamsarmax/Panamax contracting has remained at a steady level – around 40 vessels in Q3 – taking the orderbook to roughly 10% of the active fleet and a similar level of Supra/Ultramax contracting over the same period. In the tanker sector, despite a quiet last week, contracting across all sizes has been similar to the total dry bulk contracting in Q3, with MR and Suezmax contracting leading the way.
Secondhand sales
On the dry bulk side, the market moved way ahead of last week’s pace, with the number of vessels being reported as sold appearing fairly sound at this point. As a reflection of this, Handysize market continued on its recent firm-footing (alongside with the Capesize one), leading the upward momentum in the snp activity, as presented in 4-week trend analysis table in the front page. Moreover, the recent support found in asset price levels has been already translated in upward push, a situation that can potential impede market’s liquidity in the near term. On the tanker side, things in the snp market continue to disappoint at this point, given the scarcity of fresh transactions coming to light. As we experience shifting momentum in spot earnings w-o-w, especially in the current asset price regime, activity will prevail volatile in the upcoming period.
Ship recycling sales
Broadly the market remains in similar position as it was the week before as Indian breakers continue to bid higher and out compete their Sub-Continent neighbours. Although well below the very firm price of the ‘Fortune Trader’ in the preceding week, the $580/LDT for the ‘MSC Jasmine’ is in-line with the market, the bunkers likely supporting the price in the face of the restricted yard list. The sale marks the 12th MSC boxship sale for recycling so far this year and green-sales could be a boon for Indian yards which are well ahead of their peers in terms of green-processing capacity.
The four tanker sales make for one of the busiest recycling weeks for the sector so far this year, which has lagged well behind the scrapping seen in 2022 – only 25% of the number of tanker sales seen last year despite being 75% through the year and seen vessels on average 4-5 years older than was the case last year. Now that tanker earnings are somewhat more average than in recent months, we could see them boost the ranks of container and bulker vessels liable for demolition in the near future.
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Source : Capital link
