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The tanker market continues to steal the limelight

The tanker market continues to steal the limelight with the BDTI closing at 1,823 points, up by 5% w-o-w, the highest level since mid-October 2019 while the BCTI closed at 1,227, marginally down by 0.4% w-o-w. The healthy freight rates in the wet market have benefited the second-hand transactions as about 630 tankers have changed hands during the year, significantly more than the 420 transactions, of the same period in 2021 and the 510 transactions in all of 2021. The MR sector has the lion’s share with 218 vessels, 92 of them being over 15 years old. The chemical tanker sector comes second with 125 transactions compared to 85 in the whole 2021 and at the third place is the Aframax/LR2 segment with 120 transactions in 2022 until now, 74 of them are vessels older than 15 years. The only size that has less sales this year compared to 2021 is the VLCC segment. 68 VLCCs have changed hands in 2022, which is 4 vessels less than the same period last year, 13 vessels less than the whole 2021, while 38 out of the 68 sold, are vintage vessels. Another interesting statistic about S&P transactions on the tanker sector year to date are the 129 Ice class vessels that have changed hands (20.5% of all the tanker transactions YTD) compared to only 69 sales of ice class vessels the same period last year. 45% of ice class vessels sales in 2022 took place during the past three months.

The dry bXclusiv Shipbrokers Inc.ulk market has been covered by a “grey cloud” since mid-October, as the freight rates in all the segments have softened significantly, with the BCI losing weekly 19.4%, closing at 1,670 points, while the BPI decreased by 15.3% and closed at 1,817 points. The smaller sizes, the BSI & BHSI, have also reduced on weekly basis by around 11.6% and 6.7% respectively during the same period and closed the week at 1,483 and 897 points accordingly. During the past week, the World Steel Association released an update of its Short-Range Outlook (SRO) for 2022 and 2023, forecasting that steel demand will contract by 2.3% in 2022 to reach 1,796.7 Mt after increasing by 2.8% in 2021, while in 2023 steel demand is estimated to see a recovery of 1.0% to reach 1,814.7 Mt. However, the European’s Union steel demand is estimated to erode by 3.5% in 2022 and fall 1.9% in 2023, hit by high inflation and high energy prices pushing to factory shutdowns. On the other hand, in China, steel demand is estimated to decrease by 4% in 2022, due to the strict COVID measures which impacted the property market as the investments in real estate slowed down to its worst in 30 years. In 2023, steel demand will remain flat under the assumption that small new stimulus measures will be introduced, and lockdown measures will be removed largely later in the year. Noteworthy to mention, coal which is a key part of the coke-making process, and iron ore are main components of steel production. As a result of the reduced steel demand, we may see a downward trend in the demand for iron ore and coal in steel production, which may also negatively affect the charter rates in the short run with the asset values to follow. It remains to be seen for how long coal fired energy plants will continue to operate until oil and gas energy flows return to normality.

Another hit to dry bulkers market came on Saturday. The Kremlin suspended its participation in the UN-backed deal with Kyiv, that allowed the passage of million of tonnes of grain via the Black Sea. Moscow had guaranteed safe passage of grain-carrying cargo ships from previously-blockaded Black Sea ports under the deal. Ukrainian authorities said 218 ships had been immediately affected by the suspension. Of those, 95 had already left its ports, 101 were waiting to collect grain and 22 were loaded and waiting to set sail.

Sale and Purchase:

For one more week the Post-Panamax & Panamax vessels were buyers’ preference. The BWTS fitted P-Panamax “Great Animation” - 93K/2011 Jiangsu Jinling & her one-year older sister “Great Glen” - 93K/2010 Jiangsu Jinling were sold for USD 37 mills enbloc to Middle Eastern buyers. The Panamax “Navios Taurus” - 77K/2005 Imabari found new owners for USD 14 mills. Finally, the BWTS fitted Ultramax “Nord Yucatan”- 64K/2019 Nantong Xiangyu sold for USD 28.5 mills.

As the spot market remains robust, tanker S&P activity continues to be high. Larger vessels, mainly VLCC and Suezmaxes, continue to be in the spotlight of secondhand activity. The VLCC “City of Tokyo” - 304K/2004 Universal was sold for USD 49 mills. On the Suezmax sector, the BWTS fitted “RS Aurora”- 160K/2018 SWS was sold for USD 66 mills to clients of Delta Tankers, while the “Kimolos Warrior” - 157K/2013 Samsung was sold for region USD 46 mills. The LR2 resale “Daehan 5075” - 115K/2022 Daehan found new owners for USD 72.5 mills. On the same sector the Scrubber fitted “Raffles Harmony” - 105K/2013 HHI changed hands for USD 41mills. Last but not least, the 1A Ice Classed MR2 “Atlantica Bell”- 51K/2006 STX was sold for USD 20.7 mills.