Markets at a glance:
Newbuilding market
The newbuilding market lacked momentum as of the past week, with minimal activity being reported during the same time frame. A fair mobility prevails from the dry bulk sector, with another order for an Ultramax vessel surfaced as of late.
Thinking about the recent improving momentum, especially from the side of earnings, we can expect many fresh projects being finalised during the remaining part of the year. Further to this, despite the recent clampdown in terms of activity from other core sectors, it would be surprising not seeing another new round of projects coming to light amid the final quarter of the year.
Secondhand market
Dry bulk snp market has returned on a fervent mode for some time now, given the improving flow of transactions taking place, especially from key size segments (namely Panamax and Supramax). Further to this, asset price levels have found sound support and continue growing across all age groups and asset classes. Tanker sector appears volatile in terms of activity taking place from one week to another. Some recent en bloc sales noted in the smaller sizes, helped overall activity remaining at modest levels as of late.
Ship recycling market
Some clear bearish signs have resurfaced in the Indian Sub-continent as LC issues and steel prices undermine the market. In light of this, retaining both recent scrap prices and sales of tonnage could be challenging through the remaining part of the year.
Freight market
Dry bulk
Capesize
It was a notable week for the biggest size segment within the bulk sector, with the BCI-TCE even breaking the $30,000/day mark. It has been almost a year and a half since such firm figures were last seen. In line with this, positive momentum prevailed across most key trade regions, with tight tonnage availability in North Atlantic, and fair enquiry in the Pacific (especially during the early part of the week) being some of the highlights of the week.
Panamax
Finally, there was a change of course within the Panamax market, with the BPI TCE moving within close proximity with the US$ 15,000/day territory, while noticing the modest growth of 4.5% during the same time. Once again, there was a split fortune between Atlantic and Pacific basins, with the former though, succeeding in an increase of 19% week-on-week.
Supramax
Here, the market resumed on a positive mode, albeit on marginal terms. At this point, enough support surfaced from the fair appetite for tonnage from USG region. On the other hand, ample tonnage availability in Asia, coupled with relatively tight enquiry, kept things mostly under slight pressure.
Handysize
A flat week for the Handysize segment took place, with the respective TCE somehow “stuck” at low US$ 12,000/day levels. In the separate trade regions, we noticed a some sort of split performance.
Tanker
VLCC
Despite the initial good start of the week, with freight earnings gaining momentum, things reached a plateau quickly and actually softened at the end of the week. As a result, spot TCE closed on Friday at US$ 12,709/day, roughly 25% less on week-on-week basis. Additionally, negative pressure led the period market down and the 1yr charter rate noted another considerable correction, and it sits well below the past 12-month average levels.
Suezmax
Another bullish week took place for the Suezmax market, which saw its respective TCE climbing 37% higher w-o-w, while being once again well above the US$ 50,000/day levels, and very close to the past year’s average levels at the same time. At this point, the market found sound support in the BSEA-Med trade, with recent momentum in the Aframax market adding upward pressure too.
Aframax
Attuned to this, things continued on the bullish trajectory in the Aframax size segment for yet another week as well, with its benchmark TCE rallying at US$ 58,705/day. Across all main trade regions, things appear fairly bullish at this point.
MR
The trend in the MR market remained fairly similar with that noted in the week prior, with both the Atlantic and Pacific basins moving in tandem and recording considerable losses. Once again, the correction in the Atlantic prevailed deeper, widening the spread between the two further.
New building orders
The newbuilding market prevailed in a state of clampdown as of the past week, with a very limited number of new projects coming to light during the same time frame. Yet again, we noticed mobility from the dry bulk sector, with a fresh order for an Ultramax vessel on behalf of Turkish interests. Further to this, while we continue experiencing an improving sentiment, to a fair extent due to the solid support found from the recent upward rally in spot freight levels, we can expect further firm projects moving forward within the final quarter of the year. On the other hand, in most other main sectors, things appeared fairly quite, that may well suggest that we are in a state of plateau for some of them, in this market regime at least. All in all, already amid the final part of the year, we can anticipate the overall flow of new ordering to continue on a relatively firm footing
Second hand sales
On the dry bulk side, it is clear that the snp market is on bullish track for some time now, amid a rebalance in flow of transactions coming to light. Notwithstanding this, as of the past week we witnessed a brief pause in reported activity of some size segments, although it was insufficient to alter the recent sound upward momentum. At the same time, asset price levels continue to rise across all size segments and age groups, a mere reflection of the current robust buying appetite prevailing in the market. On the tanker side, despite the recent positive signs in sales volume, the snp market continues experiencing some steep ups and downs periodically. On the other hand, this has not discouraged price ideas climbing even further among interested parties, seemingly attuned to the recent trend noted in the spot freight earnings.
Ship recycling sales
The scarcity if transactions has given the market a sluggish feeling lately. There is an ongoing sense that the overall market is experiencing some slight pressure amid the decreasing trajectory in scrap prices in some key recycling destinations. More specifically, the situation in India seems slightly bearish at the point, with local steel prices gradually declining and leaving local participants with uncertainty over whether to compete with recenthigh levels. In both Bangladesh and Pakistan, the ongoing financing difficulties continue being a significant obstacle, having already resulted in less tonnage being concluded there over the past few weeks. Further compounding the situation, the recently improved sentiment across many sectors will likely result in a shortage of tonnage in the near term.
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Source : Capital link
