Stability Amidst Softening: Handysize Dominance And Market Dynamics

This week in the maritime market, the dry cargo sector is highlighted by a steady demand for handysize vessels despite softening freight rates, with sales remaining stable. Larger vessel sales have slowed, indicating a possible pause in activity but maintaining stable values. In the tanker market, high values in the crude sector are under pressure due to a slow spot market, while the product sector sees cautious buying. The recycling market faces subdued sentiments, impacted by the Monsoon season and economic measures in India, Bangladesh, and Pakistan, which have reduced steel demand and recycling activity, reports Gibson.

Dry Cargo

Handy Hunt

This week, the handysize sector dominates the sales list despite a recent dip in freight rates. Buyers view handysize vessels as a stable investment with less earnings volatility. The time charter average has ranged from US$12,500 to 14,000 pd since the beginning of the year. Values remain stable, as seen in the sale of “SPICA HARMONY” (36,908 dwt / built 2019 Oshima, Japan) at US$28.5 million, aligning with Pan Ocean’s purchase of the sister ship “PERSEUS HARMONY” at US$29.5 million in April. Older handysize vessel values are under pressure, showing signs of further softening.

Sales of larger vessels have slowed, indicating a possible pause in activity but with stable values. The scrubber-fitted post-Panamax “CLAAS OLDENDORFF” (95,750 dwt / built 2013 Imabari, Japan) sold for US$27 million, consistent with the April sale of the unscrubbed sister ship “LOWLANDS RISE” at US$26 million. The kamsarmax “BW KOBE” (81,586 dwt / built 2019 Tsuneishi Cebu, Philippines) reportedly sold for around US$37 million, matching previous sales.

Tankers

Product Plateau

The tanker market remains slow, with distractions from events like Wimbledon and the Euros. High values in the crude sector are under pressure as the spot market slows, potentially leading to price adjustments for older tonnage. Sellers of modern units may wait out the summer lull. In the product sector, despite high values, some buyers are taking advantage of the market. Indian buyers acquired the “ZEZE START” (49,999 dwt / built 2009 Hyundai Mipo, S. Korea) for US$27.5 million, similar to the price for the same-aged “GUNMETAL JACK” (50,106 dwt / built 2009 SPP, S. Korea) sold a month ago, suggesting a peak in prices.

Recycling

Kicking The Can

Recycling market sentiments are subdued, with a quiet few months anticipated. The Monsoon season in India and Bangladesh has reduced steel demand. India’s budget, scheduled for July 23, is awaited for potential infrastructure project announcements that could boost local steel demand. Bangladesh and Pakistan’s budgets have negatively impacted recycling markets, with steel plate prices in Chittagong dropping by almost US$30-35/LT. Bangladesh received another IMF loan, but Letter of Credit restrictions continue to hamper activity. In Pakistan, a 2% increase in customs duties has further dampened recyclers’ hopes of securing tonnage.