- The container shipping market experiences stabilization in charter rates amidst declining freight rates.
- While discussions continue in various segments, caution prevails among operators due to the negative trend in freight rates.
- Despite this, some individual deals have been struck, and capacity management may support vessel utilization in the face of declining earnings.
- Additionally, notable activity is observed in vessel transactions, with an increase in vessels considered for demolition as market prospects decline.
Recent updates in the container shipping market reveal ongoing discussions in the post-Panamax segment, with a few private deals nearing completion. However, operators are now more cautious about committing to longer-term agreements due to the negative trend in freight rates. Despite this caution, charter rates remain high in this segment.
Panamax Segment
In the Panamax segment, there have been almost three weeks without any new agreements. This is primarily because operators are unable to meet the demanded periods by owners. Despite the lack of new fixtures, individual deals have occurred, such as Cosco extending the charter of the YZJ 5000 Widebeam vessel ‘JOGELA’ for an additional two-year period.
Sub-Panamax and Feeder Segments
Discussions are ongoing in the sub-Panamax and Feeder segments, with charter rates holding steady despite some vessels becoming more readily available. CMA CGM secured options and charter extensions for vessels in various regions. Additionally, both CMA CGM and Cosco have extended the charters of two 1,300 TEU vessels for their Feeder network in the Mediterranean at rates consistent with previous deals.
Freight Market Update
The FBX Global Container Index reported a 9% drop, marking the fifth consecutive week of decline. Despite the decline, the index remains 40% higher than the previous year. Capacity management may support vessel utilization amidst closing earnings headroom.
Vessel Transactions and Demolition Trends
There has been notable activity in the second-hand market, with MSC acquiring veteran container vessels from German-based owners. Conversely, the number of container vessels considered for demolition has increased as freight and charter market prospects decline. Expectations suggest more transactions in the coming weeks as the bid/offer spread narrows.
Newbuildings and Future Prospects
Evergreen has been connected to an LOI for a series of six Methanol DF 2500TEUs in China, taking advantage of available slots. Similarly, MSC continues to be active in the second-hand market, acquiring container vessels from German-based owners at favorable prices.
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Source: Braemar
