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A worldwide outpouring of condolences

A worldwide outpouring of condolences followed Queen Elizabeth II's passing at 96. Since her accession to the throne in 1952, Elizabeth's reign has taken Britain from steam engines to smartphones and encompassed a largely peaceful breakup of an empire that once ‘the sun did not set on’. As the nation mourns the passing of its longest-reigning monarch, in a ceremony dating back hundreds of years, Charles, the eldest of Elizabeth's four children, has formally been proclaimed king, the oldest person to accede to the throne in British history.

Meanwhile, in the EU the things are getting tougher. The European Central Bank has raised interest rates 75 basis points to tackle record inflation, despite fears soaring energy prices will push the Eurozone into recession. The decision, which was unanimously backed by all 25 members of the governing council and matches the ECB’s previous biggest increase in borrowing costs, lifts the bank’s benchmark deposit rate from zero to 0.75 per cent — the highest level since 2011. At the same time, the European Union Energy ministers on Friday asked the Commission to come up with emergency liquidity measures to help strained energy markets, as well as severing the link between expensive gas and power prices. In Brussels, ministers called for steps to skim off energy companies' profits and discussed a proposal to cap imported gas prices, with an idea floated to limit the prices of all imports. In the end, they agreed that needed more work. The challenge is to find solutions that can be applied across the region and still fit each of the 27 member states economies and national power systems, which are fed by varying energy sources. As the energy crisis continues and Europe is trying a swift from Russian energy sources, the global demand for oil is likely to rise by an average of 2m bpd. The US Energy Information Administration (EIA) forecasts that US crude oil production will hit record levels in 2023, in a boost to the tanker market, with Europe and China likely to prove willing buyers. In numbers, domestic production of 11.8m barrels per day (bpd) in 2022 is likely to rise to an average of 12.6m bpd in 2023, outstripping the record of 12.3m bpd set in 2019. If the EIA forecast turns true, will be another sign that the fundamentals of the wet market are positive and probably tanker freight rates will remain at high level in 2023 as well.

In another tone, occasioned by robust freight rates in the Container & Bulker segments and the pass of the baton to the tanker market, we grabbed the opportunity to analyse the total fleet and orderbook in each category compared to the same period of 2021. In the dry bulk market, on September 2021, the total fleet was 12,578 vessels, and the orderbook 672 vessels, which equates to a 5.3% orderbook to fleet ratio. Although the current fleet has increased by 3% to 12,982 vessels, there is a significant increase of 33% in orderbook at 892 orders. Furthermore, the container market has also noted a similar increase, since the fleet accounts for 5,719 vessels currently, up by 3% compared to September 2021 when the fleet accounted 5,536 vessels, while the orderbook has soared by 125% to 933 vessels today from 415 a year before. Finally, in the tanker market, which is nowadays on the spotlight, the active fleet (>= 10,000 DWT) has increased by around 2% to 7,359 vessels from 7,250, while the orderbook has decreased by 30% to 326 vessels from 465 a year ago. The low tanker orderbook can be explained by the poor wet market and the negative freight rates of the past year combined with the high newbuilding prices and the fully booked yards slots until mid-2025. The low tanker orderbook is the fact that guarantee a low fleet growth for the following years, a factor that has helped freight rates to go up.

Undoubtedly, the shipping industry has continuously grappled to comply with new environmental regulations and reduce GHG emissions but there are still many things to be done and be decided, and this is reflected in the numbers of the active fleet & orderbook statistics. In the dry bulk market, as of today, the alternative fuels capable & ready fleet is accounted for 97 vessels, less than 0.8% of the total fleet. In the dry bulk orderbook, the alternative fuels capable vessels are about 5% (43) of the orderbook, while the alternative fuels ready are about 3% (24). The 3.8% of the total container fleet is about alternative ready & capable vessels (160) but the orderbook’s stats are quite better as the alternative fuels capable vessels are about 14,5% (136) of the orderbook, while the alternative fuels ready are about 17.4% (163). Last but not least, the tanker fleet (>= 10,000 DWT) has noted about 2.5% vessels which are capable or ready for alternative fuels (188). In the tanker orderbook the ratio is about 34% (111), the best ratio between the orderbooks of the different vessel types, but this is mainly because of the very low orderbook in the tanker segment, the only one with a decrease within the year.

Sale and Purchase:

As we have mentioned in our previous reports, the downturn of the dry bulk market has reduced the volume of transactions. However, after a few weeks of subdued market inactivity, some owners seem to come back to the dry pitch. On the Newcastlemax sector, the BWTS fitted “Stella Daphne” - 250K/2017 Qingdao Beihai & the “Stella Isabel” - 250K/2015 Qingdao Beihai were sold for USD 98 mills enbloc to clients of Berge Bulk. The Panamax “Navios Alegria” - 76K/2004 Tsuneishi found new owners for USD 13 mills. Furthermore, Jinhui Shipping announced the acquisition of 2x Ultramaxes, the “Western Santos” – 63K/2014 Jiangsu Hantong & the “Hanton Trader I”- 63K/2014 Jiangsu Hantong for USD 25.4 each basis delivery between 15 September 2022 and 30 December 2022 for the former and between 15 September 2022 and 30 November 2022 for the latter. Finally, in the Handysize sector, the BWTS fitted “Aquarius 77” - 36K/2016 build in Tsuneishi Heavy changed hands for USD excess USD 21 mills.

For another week, tanker buying and selling activity remains strong, with the Aframax sector seeing the most transactions. In the VLCC sector, the BWTS fitted “Tema” - 312K/2005 Kawasaki was sold for USD 34 mills. The BWTS fitted Suezmax “Lila Guangzhou” - 159K/2004 Bohai rumoured sold for USD 23 mills. The Ice Class 1C Aframax “Stride” - 105K/2009 HHI sold for USD 32.5 mills to Middle Eastern buyers. On the same sector, the Ice Class 1A “Beks Atlantica” - 115K/2006 Samsung was sold for USD 33 mills. Noteworthy to mention, back in September 2021 the vessel had been sold for USD 15.5 mills. Last but not least, clients of Mercan Group acquired 2X MR2, the “NCC Sudair” - 46K/2007 HMD & “NCC Rabigh” - 46K/2007 HMD for USD 35 mills enbloc basis surveys due.

Xclusiv Shipbrokers Inc.