Market insight
By Vasilis Moiris
SnP Broker
Another active week in terms of SnP has concluded in the dry bulk market with a diversified array of transactions recorded. Despite the correction in dry trade freight rates, there is still ample purchasing appetite displayed from interested parties, while vessel values – more or less – remain stable.
In the Capesize front, clients of Berge Bulk are linked to the purchase of BWTS fitted ‘Cape Fushen’ 178k/2008 (SWS, China) at $13.8m, a price slightly lower than last done. Greek buyers which are clients of Polembros are reported to have picked up another Post Panamax bulker, namely the ‘Double Paradise’ 95k/2011 (Imabari, Japan) for $15.5m and it is BWTS fitted. In the Panamax sector, the ‘Priscilla Venture’ 77k/2008 (Oshima, Japan) is reported to be sold at $11.35m to Greek buyers which are clients of Franco Compania Naviera. The price is slightly firmer than what the ‘Agri Marina’ 77k/2008 (Shin Kasado, Japan) obtained in end July dates at $10.8m, albeit with an inferior survey position.
Nisshin Shipping are continuing their disposal of assets and this week are reported to have committed on subjects their BWTS fitted TESS 58 ‘Western Seattle’ 58k/2014 (Tsuneishi Zhoushan, Japanese affiliated) for $14.5m. Nisshin have also recently sold sister vessel ‘Western Honolulu’ at $14.2m to Greek buyers.
Activity in the tanker sector was less robust with few reported sales. Middle Eastern buyers which are clients of Marshal Shipping are linked to the purchase of VLCC ‘ADS Stratus’ 299k/2002 (Hitachi, Japan) for $25.5m which is higher than the last done. Moreover, Avin are reported to have sold a couple of older Suezmax tankers namely ‘Kriti Spirit’ 160k/2000 & ‘Kriti Sfakia’ 160
κ/2000 (Daewoo, S. Korea) to Russian buyers at around $14.4m each. The aforementioned price appears in line with the sale of Sonangol Kizomba 159k/2001 (Daewoo, S. Korea) which was sold for $16.5m to Middle Eastern buyers in August.
With regards to the dry sector, SnP activity is likely to remain robust in the near future if the assumption that rates will remain at relatively “healthy” levels is undertaken. A number of ships are currently being inspected with numerous buyers showing interest; therefore, this may be indicative of significant sales volumes materializing at least during the immediate weeks ahead. In the tanker realm, speculation of an increase in storage trade may prompt buyers to up their game soon. Increased interest from potential investors in older crude tankers is also being observed.
Chartering (Wet:
Stable+ / Dry: Soft-)
The dry bulk market continued its downward momentum. With only 2 weeks remaining before the end of the third quarter, it is interesting to note that the BDI has dropped by 536 points in Q3 thus far. The BDI today (15/09/2020) closed at 1289 points, up by 7 points compared to Monday’s (14/09/2020) levels and decreased by 39 points when compared to previous Tuesday’s closing (08/09/2020). Improving fundamentals in the VLCC and Suezmax sector led to a more positive performance of rates last week, however the crude carrier market is still facing several challenges ahead. The BDTI today (15/09/2020) closed at 453, increased by 7 points and the BCTI at 447, a decrease of 18 point compared to previous Tuesday’s (08/09/2020) levels.
Sale & Purchase (Wet: Stable+ / Dry: Firm+)
SnP performance this week was healthy and well-rounded across all sectors. Dry bulk and tanker transactions continued on a similar path from last week’s substantial volumes. A significant increase in container vessel sales was observed and it will be interesting to see what lies ahead in the liner vessel SnP realm. In the tanker sector we had the sale of the “ADS STRATUS” (299,157dwt-blt ’02, Japan), which was sold to U.A.E based owner, Marshal Shipping, for a price in the region of $25.5m. In the dry bulk sector we had the sale of the “CAPE FUSHEN” (177,890dwt-blt ’08, China), which was sold to a Singaporean owner, Berge Bulk, for a price in the region of $13.8m.
Newbuilding (Wet:
Soft- / Dry: Soft-)
Newbuilding market activity remained soft for another week and this does not come as a surprise for anyone; all fundamentals are supporting a more conservative owner approach in the shipbuilding front. No dry bulk or tanker orders were recorded which further signifies the downward newbuilding trend. This overall trajectory is likely to continue indefinitely since the current market uncertainty caused by the COVID-19 pandemic is putting a significant strain on the investment sentiment present in the shipbuilding sector. That being said, it can be argued that a meaningful rebound in this sector is not likely to materialize any time soon. With freight rates for dry and tanker markets remaining at low levels, the current atmosphere of scepticism when it comes to newbuilding investments may further intensify in the coming weeks.
Demolition (Wet:
Stable+ / Dry: Stable+)
Average scrap prices in the Indian subcontinent have shown no retreat at all with cash buyers continuing to absorb demo candidates at considerably high remuneration levels. The USD 350/LDT is the benchmark that owners are aiming to reach and surpass; this has been the case in many demolition transactions during the past weeks. Some very high scrap prices have been fetched from Bangladeshi breakers, which illustrate that the latter may be considered as the best demolition destination in the coming weeks. Should this positive trend among Bangladeshi breakers continue, they may very well leave behind their Pakistani counterparts who are currently still in the lead. At the same time, India is regarded as the main destination for HKC recycling; however, with more than 1 million COVID-19 cases during the last week, it remains to be seen whether or not new lockdowns will take place as a measure to restrain the virus from spreading. Average prices in the different markets this week for tankers ranged between $205-360/ldt and those for dry bulk units between $200-340/ldt.
