Dry Bulk
Buying appetite remains healthy on the SnP front. Greeks remain the top-Buyers for second hand vessels, however some remain sceptical as to which direction the market will go in the months to come. The cost of finance is also another reason making owners sceptical when it comes to purchasing a vessel.
A 2007 Japanese Supramax was rumoured sold for $11.6 million to Korean buyers while a 2006 Japanese Supramax with Wartsila ME was rumoured to have seen offers at $9.6 million. On the Capesize sector, a 2017 blt Chinese unit was rumoured to have seen levels in the low $40’s million.
Chinese government’s advisors will recommend economic growth targets for next year ranging from 4.5% to 5.5% to an annual policymakers’ meeting, as Beijing seeks to create jobs and keep long-term development goals on track. Five of the seven advisers who spoke with Reuters said they favoured a target of around 5%, matching this year’s goal. One adviser will propose a 4.5% target, while the other suggested a 5.0-5.5% range.
Tankers
SnP activity remains limited however there are a few notable sales to report. A 2006 Korean built Aframax was rumoured sold for $37.5 million, a price in line with one-year younger sistership which was recently sold for excess $39 million. On the VLCC sector, two Scrubber fitted 2019 built vessels which called for offers was rumoured to have seen $107 million each. On the product sector, a 14-year-old Korean MR tanker was sold for $25.4million while two modern 2022 built MRs were sold for $54 million each to Lybian interest.
Three major shipping firms have stopped transporting Russian oil in recent weeks in order to avoid U.S. sanctions now being imposed on some shipping firms carrying Russian oil, four traders told Reuters and shipping data showed. The development is a blow to Russia as it narrows the number of shipping firms that are ready to transport Russian oil to consumers in Asia, Turkey, the Middle East, Africa and South America – although traders said Moscow still had enough shipping firms for now.
Oil prices dipped about 2% on Thursday, extending losses after the postponement of an OPEC+ meeting stoked expectations that the group might not deepen output cuts next year. Brent crude futures fell to around $80 a barrel. U.S. West Texas Intermediate crude to around $75 per barrel.
According to Gibsons, there might be some cause for the product tanker sector to be optimistic for the year to come. Firstly,from a trading perspective, the East to West gasoil arb should evolve to support interregional flows to Europe for eventual restocking, especially given the fact that Europe is structurally short in distillate production. Secondly, the arb could open up wider as refinery complexes in the Middle East and India come out of their current maintenance schedules, increasing regional supply East of Suez, which should widen the price differentials beyond current levels. Thirdly, with Middle Eastern refineries operating more competitively than those in Europe both in terms of costs and margins, increased volumes from East of Suez are likely to put additional pressure on European refining margins, further disincentivizing local production and supporting imports. On top of this, Middle distillate stocks in Singapore have been rising over recent weeks and excess supply could head West, if the arb and freight support this. If we see the arb economics translate into sustained higher volumes from the East to Europe for restocking, the LR2 and LR1 sectors should expect to find support from these long-haul flows but the extent to which will depend on the health of the European economy which for now has a long way to go in terms of building the required demand strength and industrial activity needed to send a clear pricing signal to facilitate these higher future imports. For now, attention will remain on the state of the European macro environment and how this winter plays out.
Containers
This week, the SCFI slightly declined, by 0.6% to 993 Points.For second consecutive week, the NCFI fell by 4%. The route from Ningbo to Europe/Mediterranean remained stable with minor fluctuation downwards (about 3%) while the routes from Ningbo to Middle East and West South America eased by 7% and 9% respectively, due to the oversupply in those areas. The demand for cargoes on the route from Ningbo to India/Pakistan declined, about 20% on w-o-w basis, due to the local holidays.
A 2010 Korean Panamax (4,300 TEUs) fixed for six to nine months at high $16k/day while two Chinese sister Feedemaxes secured employment at $13,950/day for ten to twelve months. For Feeders and small Feeders, fixed employments were short, between one up to six months at rates between low $8k/day and 9k/day. A small Feeder secured three-month charter at a firm rate of $12k/day.
The activity in the newbuilding sector was quiet, with no new orders reported.In the recycling market, three units reported sold to undisclosed Cash Buyers. A 1994-built Feedermax sold at $485/LDT with delivery “as is” China while two vintage Feeders a 1997 Polish-built and a 1999 Turkish-built sold enbloc at $520/LDT with delivery “as is” Malaysia.
Finance
According to Reuters, China’s Zhongzhi Enterprise Group, a leading wealth manager, told investors it is heavily insolvent with up to $64 billion in liabilities, threatening to reignite concerns that the country’s property debt crisis is spilling over into the broader financial sector. The firm, which has sizable exposure to China’s real estate sector, apologised to its investors in a letter that said it had total liabilities of about 420 billion yuan ($58 billion) to 460 billion yuan ($64 billion). The liabilities compared to Zhongzhi’s estimated total assets of about 200 billion yuan, according to the letter, which was issued on Wednesday and was seen by Reuters.
Germany’s financial firms may be well capitalised now but face challenges ranging from rising interest expenditure and weak loan demand to unrealised losses, Bundesbank Vice President Claudia Buch said on Wednesday. Interest rates have risen at the fastest pace on record in the past year and banks have done well to cope with the change but the new operating environment also holds risks, including a sharp fall in the value of securities held by lenders.
According to FT, Investors are selling dollars at the fastest rate in a year as they raise their bets that the US Federal Reserve has finished its aggressive campaign of interest rate increases and will deliver multiple cuts next year. Asset managers are on track to sell 1.6 per cent of their open dollar positions this month, the largest monthly outflow since last November, according to State Street, which is custodian to $40tn of assets. “Managers had made “significant” sales every day since weaker-than-expected US jobs data on November 3, according to the bank. That has helped put the greenback on course for its worst monthly performance in a year, with analysts warning that sales by asset managers could just be the start of a longer-term trend among investors to reduce exposure to US assets.Flows in the past two weeks point to a rapid rethink with dollar demand,” said Michael Metcalfe, head of macro strategy at State Street, adding that recent sales marked the unravelling of “an unusually large US [dollar] overweight” position.
According to FT, the balance sheets of eurozone banks are showing “early signs of stress” after a rise in loan defaults and late repayments from historic lows, the European Central Bank has warned. Officials urged lenders to increase provisions to cover rising loan losses and predicted their profits would be hit by a drop in lending volumes and increased funding costs. The ECB has increased interest rates by an unprecedented 4.5 percentage points in the past year. “A longer period of high interest rates is likely to lead to higher provisions, which in turn will be a drag on profitability further down the line,” the central bank said at its twice-yearly financial stability review.
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Source : Capital link
