Home World Intermodal Report – Week 34 2021

Intermodal Report – Week 34 2021


Please find below the Intermodal market report for week 34 2021.

Market insight 

By Mohamed Rabie,

Research Analyst

As the summer season is coming to an end, the dry bulk market continues to rally. The confidence that the outstanding freight market performance has brought, has also affected owners’ appetite for secondhand units. Since the beginning of the year, circa 600 bulkers have changed hands, with most of the tonnage being geared (around 63%). During the summer period, buying interest shifted to smaller sizes, putting the spotlight on the Handysize tonnage. To be more precise, from January 2021 till April 2021, Supramax vessels were top sellers while that changed in May and till now, with Handysize vessels being in the 1st place.

Around a quarter of the transactions were Handysize vessels with an average age around 10 yrs old. It is noteworthy to mention that more than half are built in Japan while around 40% are built in China and the rest are built in Korean and other yards.

Supramaxes hold another quarter of the transactions concluded so far, with an average age slightly older than 10 yrs. As mentioned above, in the period from January-April 2021, these vessels had the lion’s share of the secondhand transactions. Similar to the Handysize tonnage, slightly more than half of the supramaxes that changed hands are built in Japan or Japanese affiliated yards. Chinese built vessels account for around 30%, while around 15% are built in Korea or affiliated yards, and the rest are built in other countries.

Representing just under 12% of the SnP realm since the beginning of the year, Ultramax vessels hold the 3rd place. In contrast to the rest of the geared sizes, around two/thirds of the vessels are built in China, while the others are built in Japanese or affiliated yards.

Marginally lower than the Ultramax sales, the Panamax vessels hold slightly above 11% of the transactions, with around 75% of them being built in Japan, 20% in China and the rest in Korea, aging around 15 yrs old on average.

Kamsarmax vessel sales represent a rate of just under 10% of the sales that took place since January 2021. A bit above 45% are built in Japanese or affiliated yards, a bit below 45% in Chinese with the rest of the units are built in Korea and with average age slightly less than 10 yrs old.

Post-Panamaxes and Baby-Capes hold around 6% of the materialized transactions, with the vast majority of them are built in Chinese yards (around 77%) and the rest in Japanese yards. The average age for such tonnage is also around 10 yrs.

In the Capesize/Newcastlemax segments, like in the Kamsarmax segment, sales account for a bit lower than 10%, of which nearly half are built in Japanese/affiliated yards, around 40% in Chinese yards, and the rest, mostly in Korean-affiliated yards. Similar to other segments, age is around 10 yrs for these types of units.

Let’s see how the SnP market will perform in the remaining months of this year.

 

Chartering (Wet:

Stable- Dry: Firmer)

The dry bulk market is going from strength to strength, with w-o-w rate improvements taking place during the previous days. The BDI today (31/08/2021) closed at 4,132 down by 69 points compared to previous Tuesday’s (24/08/2021) levels. The crude carrier market appeared to be a bit more active during the past days, however the extended weakness of freight rates in the tanker market continued for another week. The BDTI today (31/08/2021) closed at 610, an increase of 5 points, and the BCTI at 535, an increase of 48 points compared to previous Tuesday’s (24/08/2021) levels.    

Sale & Purchase (Wet:

Softer Dry: Stable-)

Last week’s SnP activity was dominated almost exclusively by dry bulk and Container unit transactions whereas tanker deal volumes were bearish with a rather small number of tanker deals being recorded. In the tanker sector, we had the sale of the “STARLIGHT VENTURE” (318,825dwt-blt ’04, S. Korea), which was sold to Nigerian buyers, for a price in the region of $30.0m. On the dry bulker side sector, we had the sale of the “OKEANOS BLISS” (76,636dwt-blt ’08, Japan), which was sold to Greek buyers, for price in the region of $18.75m.

Newbuilding (Wet:

Softer / Dry: Softer)

Last week, newbuilding contracts for non-conventional type of units have almost monopolized owners interest while the absence of tanker units for a third consecutive week cannot go unnoticed. In the dry bulk sector, Croatian owner Jadroplov concluded a deal with an undisclosed Chinese yard for the construction of two firm plus one optional 63,000dwt Ultramax vessels. Gas carrier sector was popular last week; it came to light that Celsius Shipping declared an option for two 186,000cbm LNG units at Samsung at a price of $196.2m each. One dual fuelled 86,700cbm was ordered by K-Line at Kawasaki yard while Hyundai Glovis has also inked a deal with Hyundai Samho for the construction of two 86,000cbm VLGC vessels. Each vessel will cost around $84.0m and will be able to use both LPG and conventional fuels. Container deals were also present with a total of 10 feeder boxships being ordered last week. Norwegian owner Songa ordered two 1,692teu boxhsips at Huanghai Shipbuilding while two 1,140teu units were ordered by StarOcean Marine at Fujian Southeast for a price of around $20.0m each.

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

The recent fall on steel plate prices continues to affect the Indian-subcontiment demolition market activity where breakers have adopted a wait-and-see approach for the time being. Indeed, buyers’ unbridled appetite which resulted in historical scrap levels has now be in a pause mode which coupled with the scarcity of offered candidates has led to a low number of confirmed demolition sales. However, with iron ore futures gaining positive momentum, it will be no surprise to see offered bids remaining close to the outstanding level of $600 per ldt during the last quarter of 2021. Last week, the average Bangladeshi scrap levels were unchanged w-o-w followed by Pakistan where local breakers showed their intention to rule the Indian subcontinent market by improving their bids yet with the overall sentiment overshadowing by the hesitation caused by the uncertain outlook. In India, average bids remained steady w-o-w, yet with offers for specialist and HKC vessels at premium levels with buyer’s interest remaining strong for such types of units. Lastly, in Turkey, both imported and domestic steel prices suffered discounts with breakers bids stuck at the previous week’s low levels.

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