Please find below the Intermodal market report for week 52 2020.

Intermodal Report Week 52 2020

Market insight 

By Nassos Soulakis, SnP Broker

Despite the market shock in the 1H2020 and the suppression of interest in SnP, the 2H2020 compensated for the previous standstill, with the number of dry bulk transactions surpassing those of the 2H2019. Excluding sale and leaseback, slightly over 500 SnP dry bulk deals took place during 2020, approx. the same number as in 2019. The average age of the fleet transacted was approx.11 years old. Japanese units were responsible for approx. half of the total, while Greek and Greek based buyers prevailed in more than 35% of the transactions. Once again, geared vessels transactions stood out (approx. 60% of the deals), while of note is that that after a prolonged period of subdued interest in Capesize, the sector revived towards the end of the year. Capesize deals in 2020 have ended up more than double compared to last year, with 50% of the transactions concentrated in the 4th quarter of 2020.

As the year draws to a close, we are presenting below a detailed overview of the 2020 SnP transactions per dry bulk vessel size and age group.  As a general comment, while the COVID-19 spread continues to be in full swing, widespread vaccinations and global economic stimuli create an optimistic market outlook for next year. Absent any black swans, we anticipate that the increase in SnP activity observed during the last quarter of the year, as well as the increased physical vessel inspections, will be a precursor of a sustainable rise in dry bulk vessel acquisitions.

HANDYSIZE: A total of 138 deals materialized in this sector, with an average age of 11.7 years old. Overall, interest in Japanese built vessels prevailed, consisting of approx.61% of the total transacted units, while more than 40% of the buyers were Greek and/or Greek based.

• <10 years old age group – total of 56 deals (41.0%): One third of the total deals referred to 37 & 38k dwt units, around 20% were 34k dwt & around 18% were 28k dwt Japanese units. Main source of tonnage were Japanese owners with around 20 of their units sold. Greeks, German, Korean & Swiss Sellers follow with 4 deals each. Greeks & Greek based companies were counting for almost half of the buying interest. Rest of the buying interest was equally distributed to various nationalities, with the Vietnamese at 4 deals being the only significant group.
• 10-15Y old group – total of 49 deals (35%). Almost 40% of the deals were on 32k dwt units (10x Chinese & 8x Japanese) & just above 20.0% on 28k dwt. 22% of the Sellers were coming from Japan, just below 15% from Greece and around 8% from Chinese & US based owners. Greeks & Greek based companies were counting for 45% of the buyers here. Vietnamese with 8 deals out of the 49 were the second most active player, with Turkish at 6 deals being the third.
• >15Y old age group – total of 33 deals (24.6%): – 10x were 28k Japanese & 8x 32k (16/22 deals were on Japanese units). Half of the Sellers were Europeans & half of them Greeks. HK based & Chinese owners were counting for one third of the Sellers. The main buying interest was equally distributed amongst Greek & Greek based companies, Chinese, Vietnamese & Middle Easters, with 6, 5 and 4 deals respectively.

SUPRAMAX/ULTRAMAX/HANDYMAX: A total of 196 deals materialized in this sector, with an average age of 11.0 years. Overall, interest in Chinese built vessels prevailed, consisting of approx. 42.0% of the total transacted units, while approx. 29.0% of the buyers were Chinese, followed by Greek and/or Greek based buyers at 22%.

SUPRAMAX: Total of 138 deals (70.4%):

• < 10yrs old age group – total of 45 units (33%): – half of the deals were 57k dwt Chinese designs, with the rest of the units being 56kdwt & 58kdwt at 11 & 8 units respectively. Most of the units sold were Chinese (19/45) with Japan (+affiliated) & Korean (+affiliated) units followed at around 10 units each. Main pool of sellers consisted of Japanese with 13 units while the second biggest source were Greeks at 9 units. Greeks with 19 purchases & Chinese with 14 were the top Buyers for this size/age.
• 10-15Y old group – total of 64 deals (46%): – 36% of the deals were for 52-53k units (mainly Japanese, with some 53k Chinese units). Japanese 56k designs were counting for around 23% of the deals. Bigger Supras of 58k dwt were in total 9 (consisted mainly from Crown 58/Chinese design & TESS 58). All in all, Chinese totalled 33 units, with Japan + affiliated units following at 28. Sellers were mainly coming from Greece (16), Japanese (13) & German (9). Major buying interest was for account Chinese owners (23 units), followed by Greeks (12 units)

ULTRAMAX – total of 41 deals (21.0%):  A 60%-40% split between Chinese & Japanese yards with most of the units sold between 2015-16. Main Sellers here were Scorpio with 18 confirmed deals & 9 deals from Japanese Sellers. Greeks with 11 deals & Omani with 6 deals were the hottest Buyers for Ultra this year.

HANDYMAX – total of 17 deals (8.7%): Vast majority of the units on the Handymax sector is Japanese. Main source of tonnage for sale were Greek owners with 6 out of the 17 units & Taiwanese being second with just 3 units. Main Buying interest came from Chinese & HK based owners at 4 units each, with Ukrainians & Russians counting for another 4 deals together.

PANAMAX/ KAMSARMAX/POST PANAMAX: A total of 121 deals materialized in this sector, with an average age of 11.4 years. Overall, most of the interest was for Japanese vessels, consisting of approx. 57.0% of the total transacted units, while approx. 23.0% of the buyers were Greek and/or Greek based.

PANAMAX: Total of 54 deals (45.0%):

• < 10yrs old age group – total of 5 units (9%): 3 of the units were Chinese & 2 Japanese. Sellers were Greeks & Japanese with 2 units each. Buyers were mainly Greeks with 3 deals.
• 10-15Y old group – total of 26 units (48%): 2/3 were Japanese units and the rest Chinese. Sellers were mainly Greeks with 11 units & Japanese with 4. Main Buyers were again Greeks with 15 out of the 26 deals, with Chinese second with 4 deals.

>15Y old age group – total of 23 units (43%): Approx. 65% were built in Japan. Approx. half of the seller were Greek and more than 60% of the buyers were Chinese.

KAMSARMAX: Total of 47 deals (39.0%):

• < 10Y old age group – total of 38 units (81%). 19 of these were Chinese and 14 Japanese. Scorpio was one of the main sellers, with 11 units sold and Japanese at second place with 4 deals. Greeks again with 25 deals were top in the list of the Buyers.
• 10-15Y old group – Total of 9 units (19%): all of them built in Japan. Japanese were the main tonnage providers with 4 units and main buyers were Greeks with 5 units.

POST-PANAMAX – total of 20 deals (37%): more than half of them were Japanese and the rest Chinese. Main Sellers were Japanese with 9 deals. Greeks & Indonesians with 5 & 4 deals respectively were the top Buyers.

CAPESIZE:  a total of 46 deals materialized in this sector, with an average age of 11.8 years. Japanese vessels consisted of approx. 39% of the total transacted units, while approx. 46.0% of the buyers were Greek and/or Greek based.

• < 10yrs old age group – total of 15 units (33%): Almost 40% of the units were Chinese, with 4 more Japanese (+affiliated yards). 3 of the 13 units came from Japanese owners. Almost half the Buyers were Greeks.
• 10-15Y old group – Total of 21 units (45%): 9 Japanese, 7 Chinese & 4 Korean units. Main Sellers were Germans with 7 units & Japanese with 4. 12 of the Buyers were Greeks, with Chinese at the second place with 4 deals.
• >15Y old age group – total of 10 units (22%). 50% of the units were Japanese and the rest Taiwanese & Korean. Sellers were mainly Chinese with 4 deals, with Greek & Monaco based onwers at 2 deals each. Main Buyers were Chinese with 6 deals & 3x Greeks.

Chartering (Wet: Firmer / Dry: Stable+)

With the Capesize market leading the way, the dry bulk main index noted another w-o-w improvement last week. Panamax market faced pressure while average earnings for the geared sizes remained overall steady. The BDI (25/12/2020) closed at 1,366 points, up by 41 point compared to Friday’s (18/12/2020) levels. Improved VLCC performance gave some small, needed boost to the crude carrier market last week. Suezmax sector activity was stable while Aframax north European market strengthened during the past week. The BDTI (25/12/2020) closed at 466, a increase of 10 points, and the BCTI at 385, a decrease of 21 point compared to previous Tuesday’s (18/12/2020) levels.

Sale & Purchase (Wet: Softer / Dry: Firmer)

Tanker SnP activity slowed down considerably this past week, with owners showing preference once again to dry bulk units where geared sizes monopolized buyers’ interest. In the tanker sector, we had the sale of the “ANTONIS I. ANGELICOUSSIS” (306,286dwt-blt ‘00, S. Korea), which was sold to Greek buyers, for a price in the region of $19.5m. On the dry bulker side sector, we had the sale of the “SBI PHOEBE” (63,500dwt-blt ‘16, China), which was sold to US based owner, Eagle Bulk, for a price in the region of $17.65m.

Newbuilding (Wet: Stable- / Dry: Stable-)

Almost one week before the end of the year, interest in the newbuilding market was mostly concentrated in the Container sector, with large units accounting for a significant share of last week contracting activity which brought the number of total orders in the sector to 35 units during the last month of the year. Among them, the most eye-catching order came to light last week; Ocean Network Express has signed an LOI for the charter of 6 ultra-large Container vessels from Shoei Kisen. These six container vessels will exceed the 24,000 teu becoming the largest units ever built. In the dry bulk sector, Chinese owner Seacon declared an option for two Kamsarmax units to be built in CSSC Huangpu shipyard while no tanker orders surfaced during the last week.

Demolition (Wet: Stable+ / Dry: Stable+)

With the exception of India which saw a depreciation in local steel plate prices that led to a small negative price’s correction during the last week, sentiment across the rest of Indian subcontinent regions improved substantially with average offered scrap prices setting beyond $400/ltd for both the bulker and tanker units. Pakistan has once again taken the lead with VLOC and Capesize units remaining significantly popular. Bangladeshi cash buyers, after their previous week short break, returned with improved scrap levels which exceeded the ones of their Indian competitors. In Turkey, the positive fundamentals which continue to emerge in the market have strengthened momentum for another week while we expect this positive trend to prevail in the upcoming weeks. Overall, demolition activity in terms of the volume of demo candidates was subdued during the past week amidst the Christmas holidays. Average prices in the different markets this week for tankers ranged between 275-430/ldt and those for dry bulk units between $270-410/ldt.