Τρι12072021

Last updateΤρι, 07 Δεκ 2021 4pm

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Market Commentary-Xclusiv Shipbrokers Inc.

0Supramaxes

With COP26 drawing to a close, increased pressure has been put on the maritime industry to accelerate its decarbonization process. 22 states (including Australia, Canada, Japan, USA, UK, France, Norway, Denmark, Germany & the Netherlands), but notably with the exception of China, have signed up to the Clydebank Declaration with the signatories of the Declaration supporting the establishment of so called ‘green shipping corridors’, or zero-emission maritime routes between 2 (or more) ports. The signatories are aiming to establish at least 6 of these corridors by the middle of the decade.

In a statement which came as a surprise to many, considering how the summit began, Washington and Beijing vowed to work together to tackle methane & illegal deforestation. Beijing did, however, successfully resist American and European Union attempts to sign up for a pledge to cut methane emissions 30% by the end of the decade from 2020 levels, stating that China will develop its own internal plan. 141 countries (including Brazil and Russia) promised to end and reverse deforestation by 2030. What started as a promise to ‘phase out’ coal use was, over the weekend, watered down to ‘phase down’ coal use after protests by India & China; more than 40 countries agreed to phase out coal power and 23 signed the Coal to Clean Power Transition Agreement. Some of the largest producers and consumers were notably absent however, including China, India, Australia and the USA.

In the present day, the world’s largest importer of iron ore, China, recorded a dip in iron ore imports in October to 91.61 million tons, a m/o/m reduction of 4.2% and y/o/y reduction of 14.2%. As China is battling to rebalance an overheated property market, and with Evergrande still not out of the woods, it is having a knock-on effect on steel exporters, with Indian steel mill exports to China only accounting for 8% of their output in the first half of the year, down from 30% last year. Coal prices remain volatile amid ongoing energy shortages coming into the winter period. Forecasts of Newcastle coal – the benchmark for Asia – are being revised to USD 123/ton, up from USD 85/ton. China’s imports of coal increased to 26.9 million tons (96.3% up y/o/y) in October as the country battled with power outages.

Oil prices this week retreated from two-week highs, with Brent around USD 82 a barrel during Friday’s session, after the Biden administration announced it was looking at ways to reduce energy costs (although the administration remains reluctant to tap into strategic reserves). Whilst calling for increased OPEC output the President of the United States, is facing internal party pressure for a US oil export ban. Increased demand, and shortage of supply, led to one trader wagering oil prices will soar past USD 250 a barrel with others more “conservatively” wagering levels over USD 200. Rising energy prices were a key factor in the announcement that the US consumer price index has risen 6.2% from a year ago (the nation’s highest annual inflation rate since November 1990) standing at 276.724.

Tanker period rates, particularly for eco tonnage, continue to head north with eco-MRs this week fetching low USD 16ks PD for 2 years with options. Charterers demand for long period crude fixtures remains strong, with an eco-scrubber fitted VLCC being booked to Trafigura for 3 years at USD 34k PD. We note that on a y/o/y basis, the BDTI has increased by 99% and the BCTI has increased by 86%. On a monthly basis they are up 16% and 28.7% respectively. Meanwhile firm scrap prices continue to tempt owners of older tankers to call it a day, with sub-Continent rates maintaining levels over USD 610-620/ton, bringing the total number of product carriers being recycled 2021-to date to 43, followed by 34 crude demolitions.

Larger vessels continue to dominate the newbuilding news, with Maran Gas ordering two LNG carrier newbuildings at Daewoo Shipbuilding reportedly for USD 410.9 mills delivery 2H 2024. Maran Gas are holding options for two more vessels. Berths for LNG carriers are now few and far between, with slots even into 2025 looking difficult to secure. Rates for LNG carriers, meanwhile, continue to climb with reports Friday of steam turbine LNG carriers being booked at remarkable levels of over USD 200k per day.

Sale and Purchase:

On the dry S&P activity, the Panamax “Yutai Ambitions”-77K/2008 Oshima is committed rgn USD 18mills to Greek Buyers.

On the Ultramax size segment, there is an increased buying momentum & downward price pressure, highlighting the present market’s tendency of notable reduction in asset values from previous last done deals. This is clearly evident in the sale of “Soho Merchant” 64K/2015 Chengxi & “Soho Trader”-64K/2015 YZJ at USD 24.5mills each to clients of Costamare. Kambara Kisen performed a TESS66 Resale, Tier III, EEDI Phase III, which committed at levels xs USD 35mills with delivery Q2 2023. On the Handysizes, Tufton Oceanic sold to clients of Union Maritime 5x Samjin Built sister vessels, the “Orient Trail”-34K/2011 Samjin, “Orient Trader”-34K/2010, “Orient Transit”-34K/2010, “Orient Accord”-34K/2010 & “Orient Tiger”-34K/2011 for an enbloc price of USD 72mills.

On the Tanker, the VLCC “Maran Corona”-306k/2003 Daewoo sold for USD 28.5mills with DD due next month. Furthermore, the Suezmax “Densa Whale”-158K/2012 HHI sold for USD 32mills to clients of Thenamaris. On the chemical segment, the “Mesabi”-13K/2006 Samho & sister “Bardon”-13K/2006 Samho fetched region USD 6mills each.

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