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In these first 2 months of 2023

In these first 2 months of 2023, the newbuilding highlights are about methanol as alternative fuel and the investment in it by some major players. Already an undisclosed shipowner has put an order for a methanol dual-fuel Ultramax bulk carrier in Tsuneishi Shipbuilding basis delivery within 2025, while South Korean flagship carrier HMM has ordered 9x 9,000 TEU methanol fuelled vessels in Hyundai Samho Heavy Industries and in HJ Shipbuilding with a total value USD 1.112 bn (USD 123.5/vessel). The vessels are going to be delivered from 2025 through to 2026. Earlier this month, Hyundai Samho received an order for 12x 13,000 TEU methanol fuel vessels linked to CMA CMG, basis delivery within 2025 & 2026 at a total cost of USD 2.056 bn (USD 171.35/vessel). However, analysts are unsure whether methanol is the ultimate alternative fuel as it presents some challenges, notably in terms of availability. Despite some concerns, there is a significant increase in the total orderbook of methanol fuelled newbuildings compared to the same period of 2022. A total of 63 vessels on order in the bulk carrier, tanker, container & gas carrier markets are methanol fuelled, and that is up by 152% compared to the same period of last year.

On the dry market things are stationary as market continues to be at low levels and idle tonnage is waiting for a sign of recovery, mainly from China. The 5 T/C average for Capes has fallen almost 50% within the week at the levels of USD 2.630, the lowest since 31st of August 2022. Meanwhile 5 T/C freight rate for Panamax is at USD 7,474, 10T/C rate for Supramax is at USD 7,038 and 7T/C rate for Handysize is at USD 7,763, levels not seen since 11 June 2020, 18 June 2020 and 9 July 2020 respectively. But it is not only the freight rates that are at low levels. Coal has seen its price on a “free fall”. Coal futures have slid towards USD 209 per tonne, a level not seen since February 2022 and 50% below the price of USD 456 per tonne seen in September 2022. Supply disruption from key exporters in Australia, warm weather and lower natural gas prices have significantly reduced seaborne imports & exports of coal.

On the wet market there is a lot of chatter about the increasing exports of WTI crude from US to Europe. Analysts think as a barometer of supply around the 1,000,000 barrels per day mark. So, anything above 1,000,000 barrels per day is seen as a strong flow to Europe and anything below 1,000,000 barrels per day is a weaker flow. In March traders expect that the flow from US to Europe will be between 1.5-1.8 million barrels per day, while in January the data showed just above 1 million barrels per day exported to Europe. If the numbers are verified, it will be the highest ever exports in a given month from US Gulf to Europe. But why such an increase in WTI exports? The two key factors that drive higher flows from the US Gulf Coast to Europe are the spring maintenance of the US refineries and the recessionary pressure in the US. Factors that have led to lower domestic demand for crude oil. In simple words there are much more crude oil barrels available to export and the combination of favourable freight rates and high refinery margins of light sweet grades have increased Europe’s appetite for more barrels. Heading eastern to India, India's Russian oil imports climbed to a record 1.4 million barrels per day in January, up 9.2% from December, with Moscow still the top monthly oil seller to New Delhi, followed by Iraq and Saudi Arabia. The Russian oil is accounting for about 30% of the 5 million barrels of Crude imported to India since the sanctions of 5th December 2022. After India’s authorities pushed state-run refiners to meet their annual production targets, avoiding the maintenance shutdowns in the first quarter, India’s oil imports are rising. While the costly logistics was a disruptive factor of Russian crude oil supply for the refiners in India, the highly discounted Russian crude price, drove them to become Russia’s key oil clients. In China the commerce ministry has met independent oil refiners to discuss their deals with Russia. Deals for importing discounted Russian crude oil that have saved Chinese buyers millions of dollars. On the state-run refiners' side, the discussion about China’s refined trade policy is still open as Beijing relaxed it last year to encourage oil products exports. As China had a closed economy for a long time & factories suffered various lockdowns due to zero Covid policy, lots of oil products stayed in storage and country’s reserves are on high levels, creating a big margin for exports. Exports which are also boosted by the supply of discounted Russian oil to the refineries. China imported daily 1.73 million barrels of Russian crude in 2022, up 8.3% from a year earlier, while imports are expected to hit a record high in February, at 5.62 million barrels, up from 3.89 million in December, which was the previous all-time high.

Sale and Purchase:

Clients of Golden Ocean acquired 6x Scrubber fitted Newcastlemaxes, the “HL Sapphire” - 208K/2021 New Times, the “HL Aquamarine”- 208K/2021 New Times, the “HL Pearl” - 208K/2020 New Times, the “HL Emerald” - 208K/2020 New Times, the “HL Diamond” - 208K/2020 New Times and the “HL Port Walcott” - 208K/2017 China Shipbuilding for USD 291 mills enbloc basis T/C back for 3 years at an average daily rate of USD 21K net/ vessel. The Capesize “Ocean Caesar”- 180K/2008 Imabari was sold for region USD 20 mills to Far Eastern buyers. Clients of Pacific Basin acquired the Ultramax “Mutiara”- 62K/2012 Shin Kasado for USD 21 mills. Finally, the Handysize “Auckland Spirit” -32K/2003 Saiki was sold for USD 9.5 mills.

On the VLCC sector, the “Cosglory Lake” - 299K/2003 Universal was sold for region USD 40 mills. Moving down the sizes, the “Glorycrown”- 157K/2009 Jiansgu Rongsheng changed hands for region USD 39 mills. On the Aframax sector, the Ice class 1A “Pelagos One”- 112K/2005 Hyundai Samho found new owners for USD 36.5 mills. The Ice Class 1A Panamax “Megali” - 74K/2007 Onomichi was sold for USD 30mills to undisclosed buyers. Clients of Gardsea acquired the MR2 “UOG Andros” - 50K/2009 SPP for USD 22.5 mills. Last but not least, on the MR1 sector, the Ice class 1B “Baltic Sun II”- 37K/2005 HMD and the “Giannutri”- 37K/2004 HMD were sold for USD 27.3 mills enbloc to European buyers.

Xclusiv Shipbrokers Inc.