Please find below the Intermodal Weekly Market Report for week 48 2020.
By Vasilis Moiris
It has been another busy week in the dry bulk secondhand market; a healthy number of sales reported predominantly from Japanese owners while owner’s buying interest remains at firm levels and on some occasions we feel that asset values are softening as we are approaching the end of the year in this challenging environment.
Starting with the Panamax segment, it was reported that Japanese owners have sold the M/V Shoyo (77,008dwt/2008 Namura, Japan built) at a price around USD 11,5 million basis special survey passed and BWTS fitted to Greek buyers. Comparably, in August the M/V Priscilla Venture (77,283dwt/2008 Oshima built) was reportedly sold at USD 11,35mill to Greek buyers as well.
As far as the Ultramax sector in concerned, Scorpio Bulkers are continuing their disposal of bulkers and they have announced the sale of four Ultramaxes; The M/V SBI Antares, M/V SBI Bravo, M/V SBI Hydra and M/V SBI Maya (61,000Ddwt/2015 NACKS, China built) have sold for USD 67.0m enbloc to clients of Hong Kong based owner, Pacific Basin. In addition, after the initial sale did not materialize, we are hearing now that the TESS 58 M/V Sea Melody (58,000dwt/2010 Tsuneishi Cebu, Japan built) which has BWTS fitted, has been committed to Greek buyers for a price at the range of USD 11.0 million.
On the tanker side, despite the fact that freight rates remain at very low levels, there is still some activity and older ships are still finding a new home. Modern ships are rare and as such they attract a lot of interest due to the fact that values are at low levels since the market drop.
It is being reported that Greek buyers clients of Pantheon Tankers have bought the M/T Jing Gang San (318,000dwt/2013 Shanghai Jiangnan, China built) for USD 45.2 million.
In the Clean carrier market, Japanese owners NYK have sold their second LR2 unit in recent weeks; the sale of the M/T Champion Prince (105.000dwt/2012 HHI, South Korea built) has materialized for a price at USD 24,5 million to Greek buyers. Last month, NYK have sold the sister vessel M/T Champion Princess reportedly for USD 25,5 million to Indian buyers which comes as evidence of the downward trend that the freight rates in the Tanker market have been following.
It appears that whilst buyers’ appetite remains firm we should be able to report more transactions in the coming weeks as a number of ships will be inviting offers.
Chartering (Wet: Soft- / Dry: Firm+)
The Dry Bulk market improved last week with all sectors displaying strength across both basins. The BDI today (01/12/2020) closed at 1,211 points, down by 16 point compared to Monday’s (30/11/2020) levels and increased by 33 points when compared to previous Tuesday’s closing (24/11/2020). Despite the fact that earnings for crude carriers ended the week below OPEX levels, sentiment in the market is now pointing to a busier activity for the remaining weeks of the year. The BDTI today (01/12/2020) closed at 455, an increase of 8 points, and the BCTI at 344, a decrease of 28 point compared to previous Tuesday’s (24/11/2020) levels.
Sale & Purchase (Wet: Firm+ / Dry: Firm+)
SnP activity remains at healthy levels this past week with prices for both the dry bulk and tanker units currently offering discounts. In the tanker sector, we had the sale of the “JING GANG SAN” (318,448dwt-blt ‘13, China), which was sold to Greek owner, Pantheon, for a price in the region of $45.2m. On the dry bulker side sector, we had the sale of the “SHOYO” (77,008dwt-blt ‘08, Japan), which was sold to Greek owner, Minoa, for a price in the region of $11.5m.
Newbuilding (Wet: Stable- / Dry: Soft-)
Activity in the Newbuilding front was quieter compared to the week prior, with only a handful of orders being surfaced on the market. Among them, a letter of intent was signed with the Abu Dhabi National Oil Company and DMSE shipyard for the construction of three firm VLCC vessels with the option for three more. If this order finalized, a total of 17 VLCC units will compose November newbuilding VLCC orderbook. Furthermore, Lepta Shipping continues its expansion strategy with a pair of Kamsarmax units being rumoured to have been implemented last week. In the case of the Gas sector, Trafigura ordered two 40,000 cbm dual fuelled Gas carriers at Hyundai Mipo, in South Korea at the price of USD 52.0 million. In terms of recently reported deals, Greek owner, Lepta Shipping, placed an order for 2 firm Kamsarmax vessels (82,000 dwt) at Yangzijiang, in China, for a price in the region of $26.5m and delivery set in 2022.
Demolition (Wet: Firm+ / Dry: Firm+)
With Bangladeshi breakers “free” to increase their bids and local steel plate prices on the rise, it was not a surprise to see offered average scrap prices reaching levels close to $400/ldt. That being said, Bangladesh’s main counterparts, Pakistan and India, will have to keep increasing their bids in order to allure owners towards their recycling yards. However, this past week, Pakistani breakers continued to absorb the majority of available tonnage while India remained the preferable destination for HKC tonnage recycling. A positive outlook has also emerged in the Turkish market, on the back of increased steel plate prices that led to improved scrap prices on all types of vessels. Even though I would not wish to end with a pessimistic note, with Covid-19 cases still in high numbers across all main demo nations, it remains to be seen to what extent the new restrictions will affect the ship-recycling market. Average prices in the different markets this week for tankers ranged between 225-380/ldt and those for dry bulk units between $215-370/ldt.