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Last updateΔευ, 24 Ιαν 2022 9am

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Xclusiv Shipbrokers Inc. market commentary

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During COP26, the U.S., Denmark, Norway, Australia, Belgium, Canada, Chile, Costa Rica, Fiji, Finland, France, Germany, Ireland, Italy, Japan, the Marshall Islands, Morocco, the Netherlands, New Zealand, Spain, Sweden & the UK, pledged to put the maritime sector on track to achieve net-zero emissions by 2050. Following COP26, initiatives have started to support shipping’s drive towards meeting set goals.

One significant collaboration is the Castor Initiative, a coalition of high-profile shipping industry players intending to commercialise the development of the world's first ammonia-fueled tanker by 2024. Singapore's Jurong Port, MISC Berhad, Lloyd’s Register, Samsung Heavy Industries, MAN Energy Solutions, Maritime & Port Authority of Singapore & Yara International have joined forces to build a pioneering ammonia-fueled tanker and revise port infrastructures and processes in order to handle alternative marine fuels in the future.
Reviewing the current newbuilding orderbook, of Bulkers, Tankers, Containers & Gas Carriers, we see a noticeable number of vessels either capable or ready to use alternative fuel, hereinafter mentioned as “alternative fueled”, and most of these orders have been placed during 2021. Year to date, 1325 ships have been inked, of which 378 (29%) are to be alternative fueled. In the table below, we observe the total orderbook of 2,241 ships presently under order of which 28% will be alternative fueled vessels. As per current orderbook, the fuel of choice is LNG so far, with 61% of the alternative fueled orders being LNG capable and 11.6% being LNG ready, followed by 14% to be fueled by LPG. Ammonia, Methanol & Ethane are fuels that are yet at an early stage of development, so there are fewer orders based on these fuels, while battery hybrid propulsion vessels are still very low in order preference.
As per table above, we see that a significant consistency towards the zero-emission goal is shown in the Gas orderbook with 86% of these being capable or ready to use alternative fuels. Tanker orderbook of 520 ships, of which 154 (30%) are alternative fueled vessels. In Container orderbook of 670 ships, 146 (22%) are alternative fueled. It is worth pointing out, that the Container orders placed only this year, are 523 ships, which are in majority larger than 8000 TEU. Least in alternative fuels choice is the Bulker orderbook, with only 57 (8%) alternative fueled vessels on order out of the 734 in total.
After the COP26, we had the MEPC77 which took place last week, but ended with no real agreement on carbon pricing measures, no funds dedicated to support decarbonisation, and even no change in the initial GHG reduction strategy. The result was “a missed opportunity” to decarbonise shipping as the IMO is delaying the USD 5 billion R&D fund decision. The idea of setting up an International Maritime Research Fund (IMRF) from a USD 2/ton fuel levy to aiming to decarbonise the shipping industry will now be accompanied by several other proposed market-based measures.

Although Omicron Variant has distressed the global markets during last week, the shipping industry has held its nerve and the gains have been extended, mainly in the dry market. Since 26th November, when WHO designated the Omicron Variant, BDI increased 404 points, a rise of 15%. Meanwhile, in the individual indices of dry, BCI went up by 18% (a rise of 688 points), BPI has increased by 507 points (19% up), BSI has noted a rise of 5% (115 points up) and BHSI experienced a rise of 20 points (1.3% up). In the wet market, the BDTI index has decreased by 0.1% (-1 point down) and BCTI has experienced a rise of 19 points (3% up).
Sale and Purchase:
On the dry S&P, there has been pronounced activity this past week. Clients of Five Oceans acquired the only Cape sold, the “Cape Treasure”-180K/2007 Koyo for USD 22 mills. In the Ultramax sector, clients of Goldenport bought “Star Artemis” - 63K/2015 Yangzhou Dayang and “Star Eos” - 63K/2015 Yangzhou Dayang for USD 53 mills enbloc, while in the Supramax sector the “Belnor” - 58K/2010 Yangzhou Dayang and “Belstar” 58K/2009 Yangzhou Dayang were sold for low/mid USD 30s enbloc.
On the wet sector, clients of Aelos Management bought the VLCC “New Coral” - 298K/2010 Jiangnan for USD 38.5 mills while the chemical tanker “Ocean Seal” - 12K/2018 Samjin was sold for xs USD 10 mills.
Finally, worth noting is the sale on the Gas sector of the “BW Sakura” - 77k/2010 Mitsubishi, which was sold to clients of Soechi for USD 52 mills.

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