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The year is 2022 A.D.

The year is 2022 A.D. The world is slowly moving towards a post Covid-19 era. Well not entirely! One large country of Asia - the second largest economy in the word - China, still struggles with the virus, implementing strict zero-COVID policies and continuous lock downs. And life is not easy for the rest of the world as China’s battle to suppress the virus has battered economies, disrupted global supply chains, global seaborne trade (45% of world seaborne trade passes through the South China Sea) and threatens world growth. Despite China's efforts to contain the virus, daily COVID infections have climbed to a record high since April, surpassing the previous peak. On November 23rd, China reported 29,754 new cases, more than the 28,973 infections reported in mid-April when Shanghai was enduring a two-month lockdown that left residents without food or medical care. The recent surge comes at a critical moment for Chinese authorities, as they are trying to decide whether to tolerate some spread of the virus or revert to strict zero-COVID curbs to halt the outbreak, at the expense of the economy. In Beijing, officials have shut down most non-essential businesses in the city’s largest district, Chaoyang, which has a population of 3.4m, while in Guangzhou, the city’s largest district - Baiyun - with a population of 3.8mn, is into a five-day lockdown. But there is also encouraging news from the East as the Chinese government is trying to make good on its promise to support the weak sectors of its economy. Xi Jinping's government is retreating from tight controls on leverage in the real estate sector that sparked the country's property crisis, allowing China's largest lenders to provide credit lines of over $162bn to real estate developers and construction companies. China's largest lender by assets, Industrial and Commercial Bank of China (ICBC), announced on Thursday it would extend credit lines totalling $92bn to 12 developers, while Postal Savings Bank of China has also increased lending to heavily indebted sectors of real estate, constructions and technology. China's struggling real estate industry, which drives more than a quarter of economic output, has been engulfed in a liquidity crisis for over a year after highly-indebted Evergrande defaulted. Bank analysts predict that residential real estate sector will grow 2% in 2023, while real estate investments and constructions will also recover, but at a slower pace. These moves are definitely encouraging for the dry market as China is responsible for almost 52% of dry seaborne trade. Looking at the dry market indices.

COP 27 in Egypt came to end and the feelings it left behind can be described as mixed at best. Representatives of the shipping industry have expressed optimism that shipping's decarbonisation targets can be aligned with broader global efforts that are starting to see the opportunities from bringing shipping into the process to work in collaboration with other industries and not isolated. In any case, they stressed that it will be extremely costly if the upcoming International Maritime Organization's meetings to reconsider decarbonisation goals do not agree on more stringent goals and means for achieving those goals up to 2030. COP 27 made no progress on phasing out fossil fuels or strengthening pledges to keep global warming to no more than 1.5C, despite a deal on a fund for “loss and damage” to provide financial help to poorer nations hit by climate disasters. Even as the IMO urged to ban Arctic fuel waivers, Russia and Canada have asked for a five-year delay.

It’s official: The final countdown to 5th December, the date when EU ban will come into force for Russian crude oil, has started and there are only a few days to go. Meanwhile, European Union is discussing extensively a price cap on Russian oil. Earlier this week, European Union governments had a failed attempt to define the level of a price cap for Russian oil, in the range of $65- $70/ barrel, a level that proved too low for some countries, such as Poland, and too high for others. Meanwhile, the outlook for weaker demand keeps the global oil market on edge. Surging virus cases in China triggered lockdown-like restrictions in the world's largest importer, causing a close-watched gauge of Asian crude consumption to fall to a seven-month low. The US government granted Chevron a six-month license to resume oil production in Venezuela after sanctions halted all drilling activities almost three years ago. This development coincided with an increase in oil production and acted as an additional pressure lever on oil prices. The WTI and Brent oil prices plunged below USD 74/barrel and USD 82/barrel respectively, hitting their lowest levels since December 2021 and January 2022 respectively. BDTI closed the week with an increase of 5.45% at 2,494 points, while during the week it hit the 2,495 points mark, the highest level since 08 December 2004. BCTI closed the week with an increase of 21.15% at 1,770 points mark. The clean index has 11 uninterrupted positive sessions & is at the highest level since 1st May 2020.

Sale and Purchase:

Since mid-September, the S&P activity in the dry bulk market remains quite strong, despite the reduction in the vessels’ values compared to previous months. Clients of Brave Maritime acquired the BWTS fitted “Aquataine” - 182K/2010 Imabari for excess USD 26 mills. On the Kamsarmax sector, the BWTS fitted “Lowlands Comfort”- 82K/2016 Tsuneishi Cebu was sold for USD 26.5 mills, while the BWTS fitted Non-Eco “DL Carnation” - 82K/2014 Jiangsu Eastern was sold for high USD 18 mills. Furthermore, the BWTS & Scrubber fitted Electronic M/E Panamax “Nord Libra” - 77K/2014 Imabari was sold for region USD 22 mills to clients of Velos tankers. On the Ultramax sector, the BWTS fitted Electronic M/E “Italian Bulker” - 63K/2017 Shin Kasado changed hands for high USD 26mills. Last but not least, clients of Navision acquired the BWTS fitted Handysize “Ts Bravo” - 39K/2015 Shanhaiquan for USD 17 mills.

Undoubtedly the tanker market enjoys its highest freight rates in the last 18 years, pushing up the S&P activity. The BWTS & Scrubber fitted VLCC “C. Passion” - 314K/2013 HHI was sold for high USD 60’s mills to European buyers basis T/C to Caltex until April 2023, but she could give earlier T/C free delivery. Moving down the size, Chinese buyers acquired the Japanese built “Naviga” - 151K/1998 NKK for USD 18.7 mills. The “Nordbay” - 116K/2007 Universal changed hands for USD 34 mills. On the MR2 sector, the “Athlos” - 50K/2016 Samsung Ningbo was sold for USD 41 mills to U.S buyers, while the 11-year older Ice class 1A “Atlantica Bridge” - 51K/2005 STX found new owners for USD 19.75 mills. Finally, the DPP trading Ice Class 1A “Style” - 38K/2008 HMD and the DPP trading Ice class 1A ”Sky” - 38K/2007 HMD were sold for USD 16. 5mills each.

Xclusiv Shipbrokers Inc.