Δευ11282022

Last updateΔευ, 28 Νοε 2022 6am

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Dry bulk indices closed in positive ground on a weekly basis

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The past week was the second week in a row that all the dry bulk indices closed in positive ground on a weekly basis. The BDI, after 4 consecutive positive weeks, stands at 1,816 points, an increase of 43% since August 23. BCI closed the week at 2,206 with an increase of 177% since August 23 while BPI having 3 consecutive positive closings on a weekly basis stands at 1,995 points, up by 27% m-o-m. The indices for the Supramax & Handysize also closed higher this week but on a monthly basis, BSI is down by -6% while BHSI is up by only 2% at 1,652 & 966 points respectively.

The Cape market has greatly rebounded since its August lows and the news from the market may point to higher movement. Finally, it has been declared from the EU that transport of Russian coal, fertilisers and other key goods and commodities to countries that do not sanction Moscow for its invasion of Ukraine are allowed, as a precaution against harming the food and energy security of third countries around the globe. Such goods are coal, fertilisers, certain hydrocarbons and essential goods such as wood or cement products. And apart from this, it has also been clarified that any financing, financial assistance or insurance related to such transfer is also allowed. In accordance with a different set of EU regulations, oil and oil products can also be transferred to third countries, but their insurance cannot be provided by EU entities. This means that seaborne trade from Russia to countries that do not have sanctions against it due to the war in Ukraine will continue as seamlessly as possible. Considering that in 2021 Russia exported 23.7 million tonnes of metallurgical coal and 141.9 million tonnes of coal for power generation and that many countries in Asia have reopened their lignite power plants, we conclude that the increase in ship demand, especially in the Cape but also in the Panamax sector, have strong chances to move to higher levels than today. At the same time, in 2021 Russia exported about 40 million tonnes of Grain by seaborne trade, a volume that today will be directed mainly to countries in Africa and Asia, a fact that may help Supramax & Handysize markets also to see healthier rate levels than today. Meanwhile, the latest data for Chinese and Indian economy are also adding to the positive atmosphere in the Dry bulk market. The Chinese steel and iron ore stockpiles are at low levels while the Chinese steel production has gained an upward trend and the Indian power plants stockpiles are also near the lowest levels meaning that they are going to need restocking for the winter ahead.

On the wet market, things seem to have been stabilised within the last month, maybe waiting for the next catalyst that will move the market to higher rate prices. Since the start of the western sanctions and as the flow of U.S. oil towards EU is increasing, Russia has made a turn to the East, exporting oil to China and India with a discount. These new oil flows have added ton miles and are gradually replacing pipeline oil trade with seaborne, increasing the ship demand mainly on the crude market. But according to executives of oil companies this will also lead in increasing ship demand also on the product market because as increasing Russian oil flows are moving to the East, (where there are many refineries), oil products will increasingly move in a western direction. A very interesting information that points out the increased oil demand in the near future is the announcement from the U.S. Energy Information Administration about the Strategic Petroleum Reserve, that declined by nearly 7 million barrels in the week ended 16 September, leaving it at roughly 427 million barrels. This is the lowest point since 1984 and for the first time since 1983, the SPR holds less oil than commercial storage. The BDTI index closed at 1498 points mark, with a very small increase of 0.4% on a weekly basis while BCTI index closed the week at 1,242 points, 1,04% lower than the previous week.

Finally, it’s noteworthy that the United Arab Emirates has agreed a deal to supply liquefied natural gas to Germany as Chancellor Olaf Scholz visited the Gulf state as part of a regional tour seeking to drum up alternatives to Russian energy. The supplies will be the first delivered to a new import terminal on Germany’s northern coast. The LNG shipping sector is improving even further than before as the EU is trying to find alternative sources of Natural Gas and is replacing the Russian gas through pipelines with American and Middle Eastern LNG through seaborne trade adding greatly to the LNG ship demand. LNG rates have increased to more than 12 years highs with spot rates for LNG 160K CBM & LNG 174K CBM at USD 206,000 & USD 299,000 respectively, while the 1year T/C for LNG 174K CBM is at USD 230,000, more than double since September 2018

Sale and Purchase:

On the Capesize sector, the BWTS fitted “Frontier Triumph” - 181K/2012 Imabari sold for USD 30.1mills to clients of Winning Shipping. In the same sector, Chinese buyers acquired the “Cougar”- 177K/2002 Mitsui for USD 13.75 mills. The BWTS fitted Kamsarmax “Nord Corona”- 82K/2019 Jiangsu Hantong sold for USD 29 mills. Furthermore, Safe Bulkers has entered into an agreement for the sale of “Pedhoulas Trader”- 82K/2006 Tsuneishi for USD 15.84 mills basis delivery within December 2022. Norden has sold the “Nord Indian” - 64K/2018 Tsuneishi for USD 31 mills. Finally, the Handysize “Ortolan Alpha Strait” - 34K/2010 Seko was sold for USD 15 mills to Chinese buyers.

The VLCC “Viki” - 310K/2000 Samsung changed hands for USD 29.5 mills, while the 2-year older Japanese built “Pride” - 300K/1998 Hitachi was sold for USD 24.5 mills. On the Suezmax sector, the BWTS fitted “Nordic Rio”- 151K/2004 Samsung was sold for USD 26 mills basis delivery within November to Greek buyers. 2x CPP trading LR1, the “Amber” - 74K/2008 New Century & the “Azurite” - 74K/2008 New Century found new owners for USD 18.4 mills each. Norden has sold the BWTS fitted MR2 “Laperouse”- 50K/2011 GSI for USD 26.3 mills. In the same sector, the “Ridgebury Voyager”- 50K/2008 HMD changed hands for USD 19.5 mills to Middle Eastern buyers. Last but not least, Norden has also disposed of the “Nord Gardenia” - 40K/2014 GSI for excess USD 26 mills to clients of Niovis.

Xclusiv Shipbrokers Inc.

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