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Millions around the world eagerly prepare for Lunar New Year, marking the first new moon of the lunar calendar and kicking off the 15-day Spring Festival on February 10th. This year, the powerful Wood Dragon graces the Chinese zodiac, bringing its legendary luck and vibrant energy. After navigating challenging times, many hope the Dragon's spirit will usher in a year of growth, resilience, and success.

However, amidst these preparations, China's recent robust commodity imports raise questions about their sustainability in light of the upcoming holiday. Iron ore imports witnessed a particularly strong start in January, reaching a near-record high of 112.57 million metric tons, just shy of the July 2020 peak of 112.64 million tons. Seaborne thermal coal imports also started 2024 on a positive note, estimated at 27.9 million tons for electricity generation. Though lower than December's 31.7 million tons, this figure remains significantly higher than January 2023's 20.85 million tons and reflects a continuing trend of strong coal arrivals. Similarly, LNG imports saw a winter boost, with estimated arrivals in January reaching 7.77 million tons. Both December and January figures surpassed the previous year by 12.1% and 28%, respectively, highlighting a noticeable increase. While these figures signal a promising start to 2024, the looming Lunar New Year holiday introduces uncertainty. Many factories and ports shut down during this period, potentially impacting import activity. Whether the January momentum can be sustained remains to be seen.

Leaving China aside, let's shift our focus to India and the International Energy Agency's (IEA) recent predictions. In its report, the IEA forecasts a substantial expansion of India's role in global oil markets over the next decade, driven by robust economic, population, and demographic growth. This surge is expected to make India the largest source of global oil demand growth. Slowing growth in developed economies and China opens the door for India to assume this leading position between now and 2030. To meet this anticipated rise in domestic oil demand, Indian oil companies are investing heavily in the refining sector. Over the next seven years, they are expected to add 1 million barrels per day (b/d) of new refinery distillation capacity, surpassing any other country except China.

The age profile of global fleets have shifted significantly, highlighting contrasting trends between tankers and bulkers. The tanker fleet witnessed modest growth of just 1.7%, adding only 141 new vessels due to the historically low orderbook and subdued freight rates prior to February 2022. This translated to an aging fleet, with vessels aged 0-5 years decreasing by 10%, those between 6-15 years declining by 7%, and those exceeding 15 years surging by 20%. Conversely, the dry bulk fleet experienced substantial growth driven by a steadily rising orderbook, with 488 new vessels joining the fleet (a 3.4% year-over-year increase). Younger bulkers dominated the additions, with the 0-5 year age group expanding by almost 11%, while the 6-15 year group saw a slight reduction. While vessels older than 16 years grew by 12%, their overall share remained smaller compared to the tanker fleet. This divergence highlights the differing dynamics at play in each sector, with tankers facing limited expansion and aging vessels, while dry bulk enjoys robust growth and a younger fleet profile.

Sale and Purchase

Dry:

Strong preference on the Newcastlemax/ Capesize sectors continues, with a total of 9 sales this week, almost half of total bulk carrier sales. On the Newcastlemax sector, the Scrubber fitted “Solar Nova” - 209K/2021 New Times, the “Solar Oak” - 209K/2021 New Times, the “Solar Pride” - 209K/2020 SWS and the “Solar Quantum” - 209K/2020 SWS were sold for USD 66 mills each (2021 blt units) & USD 65 mills each (2020 blt units) to Greek buyers. On the same sector, 2020 Bulkers sold the Scrubber fitted “Bulk Seoul” - 208K/2019 New Times and the “Bulk Shanghai” - 208K/2019 New Times for USD 127.5 mills enbloc. Greek buyers acquired the Capesize “Kinokawa Maru” - 181K/2013 Imabari for USD 33.5 mills. On the Kamsarmax sector, the “Vincent Trader”- 82K/2019 Jiangsu Hantong was sold for USD 31.25 mills basis TC attached till June 2024 to Chinese buyers. Chinese buyers acquired also the Panamax “Great Venture” - 77K/2008 Oshima for excess USD 14 mills. On the Supramax sector, the “Super Henry” - 55K/2008 Kawasaki was gone for USD 15 mills to Indonesian buyers, a new benchmark for that category. Last but not least, the Handysize “Nordic BC Munich” - 35K/2012 Jiangdong found new owners for USD 13.95 mills.

Tanker:

MR2 dominates on the tanker S&P activity this week with a total of 6 vessels changing hands (50% of total tanker sales this week). The Scrubber fitted Suezmax “Front Thor” - 157K/2010 Jiangsu Rongsheng was sold for USD 45.5 mills. On the LR2 sector, clients of Union Maritime acquired the “Sks Darent”- 119K/2011 Hyundai Samho and the “Sks Driva”- 119K/2010 Hyundai Samho were sold for USD 52 mills each, while the Scrubber fitted Aframax “Koro Sea”- 106K/2008 Namura was sold for excess USD 40 mills to Vietnamese buyers. On the MR2 sector, the “Dong-A Triton” - 50K/2015 HMD changed hands for USD 37.5 mills. On the same sector, the “Hansa Oslo”- 51K/2007 STX found new owners for USD 22 mills. Finally, the MR1 “Cape Camden” - 38K/2009 HMD and the “Cape Corfu” - 38K/2009 HMD were sold for excess USD 22 mills each to Greek buyers, basis SS/DD due.

Xclusiv Shipbrokers Inc.