Please find below the Intermodal weekly report 23 2022
Intermodal Report Week 23 2022
Market Insight
By Dimitris Kourtesis,
Tanker Broker
Picking up from my last insight in March, on the early days of the invasion, it’s worth pointing out the way that the fast-paced working environments and market volatility last these few years have made us to forget fast.
We are no longer reading nor listening to the news as much about an ongoing war “next door” between Russia and Ukraine, rather than what bans and/or sanctions are opposed to the Russian government and Oligarchs. While Russia has under its military control areas in the southeast Ukraine such as Kherson, Donetsk and Luhansk and they are also advancing their forces deeper, meantime Ukrainians that didn’t flee their country earlier will be soon facing famine and lack of fresh water.
The supposed “Rogue” fleet that used to pick up cargoes from Venezuela or Iran is now heading mainly to Russian ports to load Urals with a hefty premium that now trading at a serious discount (stems), either that will be Baltic Russia Primorsk / Ust. Luga or Black Sea Russian ports i.e., Novo.
The fleet mainly consisted of Aframaxes and some Suezmaxes that will be delivering their cargoes to India, Malaysia, or China. – this market is not related to current Aframax / Suezmax rates that that will not trade to Russia.
Nevertheless, still, most of the Owners are exercising the proper due diligence when calling Russian ports via their legal / P&I clubs avoiding facing any sanctions or listed ships later.
CPP
On the East of Suez CPP markets TC1 (75KT AG/JAPAN W270 – TCE $40-42K PD) / TC5 (55KT AG/JAPAN W317 – TCE $40-41K PD) are trading firmer than last week and we’re also seeing demand for LR1/LR2 picking up, as charterers starting to combine cargoes to make more sense. TC12 (35KT SIKKA/JAPAN W368 – TCE $29-30K PD), TC17 (35KT AG/EAFR) also firming up and trading at W550($52-53K PD). West of Suez, TC2 (37KT CONT/USAC) trading at W390-395 ($38-39K PD) having softened out after a strong decade, winner now is TC6 (30KT CROSS MED) W410 – that should be close to $70K PD.
DPP
East of Suez, V’s are still trading below their OPEX mark including WAF stems, more specifically TD3C is fixing, 270K NHC @ W45 with most of the June cargoes covered, TD8 (80KT KUWAIT/SINGAPORE) is also currently working on about OPEX levels, i.e. 7-8k PD. At the moment east of Suez only Kozmino (Russia) cargoes are trading on healthy levels with N.China discharge standing at $1.5M. circa $65-70K PD. BALTIC/UKCONT Aframax market is still enjoying some healthy numbers, which are anticipated to cool down gradually this week.
It has been nearly 2 weeks since the government in China started to ease the lock-down restrictions on the zero COVID policy, but authorities began to walk back some of these plans as infections creep up. So up to now we still haven’t seen the market dynamic in full as people are still restricted or under partial curfew.
High bunker prices that are mainly driven by Oil prices and demand are also pushing the freight market higher and margins are being swept off, especially for the dirty vessels. – WTI is standing slightly higher than $120 per barrel.
Chartering (Wet: Stable – / Dry: Softer)
Rates across the dry bulk market noted a downward correction during the past week. The BDI today (14/06/2022) closed at 2,284 points, down by 230 points compared to previous Tuesday’s closing (07/06/2022). Earnings across the crude carrier sectors continue to struggle for another week as the demand/supply mismatch remains in place. The BDTI today (14/06/2022) closed at 1,147, an increase of 58 points and the BCTI at 1,621, an increase of 213 point compared to previous Tuesday’s (07/06/2022) levels.
Sale & Purchase (Wet: Softer / Dry: Softer)
The Posidonia event kept owners’ attention distracted, which was evident in the SnP activity with only a handful of dry bulk and tanker sales materializing. In the tanker sector, we had the sale of the “NORDIC MOON” (160,200dwt-blt ‘02, S. Korea), which was sold to undisclosed buyers, for a price in the region of $16.0m. On the dry bulker side sector, we had the sale of the “HL PRIDE” (179,656dwt-blt ‘16, China), which was sold to US based owner JP Morgan, for a price in the region of low-mid $45.0m.
Newbuilding (Wet: Stable – / Dry: Firmer)
The shipbuilding activity bounced back last week. A plethora of newbuilding orders were placed with emphasis on container vessels, followed by LNG carriers. In the tanker sector, one order came to light, from Norwegian Utkilen. The respective owner inked a deal with Icdas Shipyard for four 6,700dwt tankers, due in 2024, which will run on LNG and biogas, and will also be methanol and ammonia ready. In the dry sector, Thenamaris concluded a deal with Hyundai Vietnam for four Ultramax 63,000dwt units at a price of $36.5m each. Reported activity in the gas sector remained firm this week. DSME Shipyard secured two deals last week, one with Maran Gas and one from a joint venture of Korean owners. Maran Gas vessels will cost $233.7m each and will operate on a ME-GI propulsion engine. H-Line Shipping, PanOcean and SK Shipping inked the second deal with DSME for a total of four LNG vessels, on behalf of Qatar LNG Project. Moreover, Knutsen OAS ordered LNG units at Hyundai Hi again on behalf of Qatar LNG. Last but not least, we have noticed a furore of newbuilding orders last week in the container sector. More specifically, there is an upward shift in the shipbuilding activity compared to the previous week with a total of five new orders. Imabari signed a deal with three Japanese owners for the construction of a total of four LNG capable box ships, measuring 23,000teu and due for delivery in 2025. CMA-CGM finalised an order with Hyundai Samho for six methanol-fuelled 8,000teu boxhips, while MSC concluded a deal for 4 LNG-fuelled 8,000teu boxships with K Shipbuilding in South Korea.
Demolition (Wet: Stable+ / Dry: Stable+)
Last week we saw an increase in bids from Bangladeshi and Pakistani buyers amidst significantly low inventory levels. On the contrary, Indian demolition offers remained steady as the softening domestic steel prices have negatively affected the appetite for fresh scrap; specialized vessels are covering most of the breaker’s interest in India at the time being. In Turkey, average offered levels lost value during the past days as breakers show no eagerness to proceed with fresh purchases due to the steel mills’ reluctance for scrap; harsh economic conditions in Turkey have moved steel industry participants on the sidelines as both currency depreciation and energy costs are leaving little room for a production boost. At the same time, the supply of vintage units remains low which could help levels to move upward in the coming weeks.
