Intermodal Weekly Market Report
Please find below the Intermodal market report for week 36 2022.
Intermodal Report Week 36 2022
The following text is the summary of Intermodal’s Weekly Market Report for smartphone users.
Market Insight, By Chara Georgousi, Research Analyst
While the Organization of Petroleum Exporting Countries and its allies agreed on a 100,000 b/d output cut last week, oil flows are in the spotlight amid concerns about declining oil prices, the recovery of China’s demand, and a possible deal with Iran.
US crude exports from USG surged 13.5% m-o-m at 3.626m b/d in August, marking a record year to date. The main importer of US crude oil was Europe with an increase in imports of 17% m-o-m at 49m barrels. Asia’s imports surged 27% m-o-m at 47m barrels, with Asia using 70% of the total 33 supertankers used to export US crude.
Brazilian crude exports surged at 1,202m b/d, hitting a 3-month high, on the back of demand recovery from Europe and China. Exports to China increased 10% m-o-m, while exports to Europe surged by 32% m-o-m. However, exports to the US fell by 67%.
Flows from the North Sea to Europe remained elevated, with a total of 98% of cargoes received by EU countries. North Sea total output for the month of August reached 1.86m b/d, flat m-o-m.
Kuwait crude exports marked a 5-month high in August, increasing 3% m-o-m at 2.811m b/d, while planning to further increase its output in September at 2.818m b/d. Exports to India fell to their lowest since June 2020 in August. Deliveries to China fell to the lowest year to date at 468k b/d, but adding shipments to China via Myanmar, they increased by 6.4% at 532k b/d. Flows to Egypt marked a 9-month high, while flows to the US also increased. Meanwhile, exports to Vietnam remained stable and exports to Japan decreased marginally. Saudi crude exports surged 10.8% m-o-m at 7.6m b/d on the back of increased flows to China and Egypt. Qatar’s August oil exports edged marginally higher at 896k b/d in August from 892k b/d in July, underpinned by higher flows to Japan which jumped to the highest since February. Flows to Singapore and UAE also increased, while exports to China fell to the lowest since November 2020, and exports to India decreased m-o-m. Crude and condensate exports from UAE slipped by 2% from a 5-year high in July to 3.645m b/d, due to a short-time halt in Fujairah exports following heavy rainfalls and floodings paired with a decline in China-bound flows. While exports to China, South Korea, and Taiwan fell during August, exports to Japan marked a record high, and exports to India also increased.
Venezuelan exports slumped in August mainly due to Chinese refinery cuts during the same month. Total exports reached 375k b/d, down 26% m-o-m. Flows to China decreased 19% m-o-m ahead of simultaneous maintenance in many teapot refineries, while export to Cuba slumped 49% m-o-m due to a fire at a fuel depot which disrupted flows.
Iraq’s crude exports plunged to a 4-year low at 3.62m b/d in August from 3.70m b/d in July. Exports to Europe fell almost 50% m-o-m, albeit higher than the 3-month average before Russia’s invasion. Shipments to China surged 27.8% m-o-m, while shipments to India edged 8.9% higher m-o-m. Iraq has been competing with discounted Russian barrels and while China and India have been snapping Russian cargoes, European buyers are shunning barrels from Iraq.
Libyan exports jumped to a 5-month high at 931k b/d in August, +58% m-o-m. Exports were buoyed by the assignment of a new chairman at the NOC, however, clashes in Tripoli in late August raise doubts about the country’s oil exports recovery.
West Africa’s August exports fell by 1.7% m-o-m to 3.15m b/d, due to ongoing thefts in Nigeria. Nigerian exports fell below Angolan for a second time during the last 3 months. Angolan exports were marginally higher m-o-m. While exports to China and Europe increased by 43% m-o-m and 1.08% m-o-m respectively, exports to the US edged marginally lower for the same period.
Chartering (Wet: Stable+ / Dry: Stable+)
Limited mineral trade remains the weak spot in dry bulk market activity, however, recent increases in ECSA and NoPac grain activity supported the sectors last week. The BDI today (13/09/2022) closed at 1,408 points, up by 294 points compared to previous Tuesday’s closing (06/09/2022). The VLCC sector activity found support from the stronger USG exports. On the other hand, Suezmax and Aframax activity faced little fresh cargoes in the Atlantic against a widening tonnage list. The BDTI today (13/09/2022) closed at 1,455, an increase of 16 points and the BCTI at 1,235, an increase of 55 point compared to previous Tuesday’s (06/09/2022) levels.
Sale & Purchase (Wet: Stable+ / Dry: Softer)
Owners remain skeptical with regard to secondhand dry bulk acquisitions, which is translating into a very short list of SnP deals. On the other hand, the positive tanker freight market momentum coupled with the optimism for a strong market ahead has led to a plethora of tanker deals being materialized. In the tanker sector, we had the sale of the “TEMA” (311,620dwt-blt ‘05, Japan), which was sold to undisclosed buyers, for a price in the region of $33.5m. On the dry bulker side sector we had the sale of the “ULTRA TRUST” (61,225dwt-blt ‘15, Japan), which was sold to US based owner, Eagle Bulk for a price in the region of $27.5m.
Newbuilding (Wet: Softer / Dry: Softer)
Last week newbuilding market was muted regarding the dry and the wet sectors, while firm shipbuilding activity came to light from the LNG and the Container segments. In the LNG segment, three deals were made known on behalf of the large LNG Qatar project, with the vessels to be booked against berths that have been pre-reserved by QatarEnergy. More specifically, the first owners are the known Korean consortium (including H – Line, SK Shipping and Pan Ocean), ordering nine 174,000 cbm carriers in total, at DSME and Samsung HI in South Korea and delivery due to 2025 and 2026 and the second owner is JP Morgan, buying two 174,000cbm units at Samsung HI, to be ready by 2025. Moving on to the feeder sector, Swiss based MSC made a deal for twelve 16,000teu vessels with Yangzijiang shipyard. The neo-panamax units that are going to be fitted with GTT’s Mark III Flex membrane-type containment system, will cost $180.0m each and are due to 2024-2026.
Demolition (Wet: Stable+ / Dry: Stable+)
Dry bulk units have caught the attention of some scrap yards as the recent downward pressure on freight market has led to negotiations of old bulk carriers with some concluded deals coming to light last week. Offered bids remained unchanged at the mid-high $500/ldt, a level that could easily attract vintage units if the dry bulk freight market did not manage to regain its strength. However, the decreased global steel production amidst subdued demand is adding significant pressure on breakers in the Indian subcontinent regions, whose purchasing power is also negatively affected by the ongoing economic frailty coupled with weather disruptions. Pakistan saw its USD/PKR ratio above the 228.0 mark at a time when heavy rainfalls have damaged operation activities across the country. In Bangladesh, L/C restriction continues to restrain big LDT units from beaching while in India domestic steel prices continue to face downward pressure. Lastly, Turkish steel mills find their opportunities curtailed by the discounts on imported Russian cargoes destined to the country. Average prices in the different markets this week for tankers ranged between 260-585/ldt and those for dry bulk units between $250-575/ldt.
