Δευ11282022

Last updateΔευ, 28 Νοε 2022 7am

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The annual inflation rate in the US slowed for a fourth month

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The annual inflation rate in the US slowed for a fourth month in a row to 7.7% in October, down from 8.2% of previous month and 15% lower from June’s 9.1% high. This figure is also the lowest since January and below the forecasts of 8%. The lower-than-expected inflation ease pressure on the US Federal Reserve to maintain its policy of aggressive interest rate rises to combat inflation. The central bank has delivered four consecutive rises of 0.75 percentage points this year to slow rising price growth and there is optimism that the next interest rate increases will be smaller and that the strategy to fight inflation is working.

As the 5th of December – the starting date of the EU seaborne import ban on Russian Crude – is now approaching and on 5th of February 2023 a seaborne import ban on Russian oil products will also be imposed, the wet Spot market continues to improve further, as Russian producers are pushing out more cargoes to Europe and US oil exports are near 10 million barrels per day. China the world’s largest crude buyer increased their crude oil purchases in October by 4% over previous month, having imported almost 10.2 million barrels a day. This is the highest since December 2021 and possibly China is trying to fill its reserves before losing its appetite for Russian crude in anticipation of the upcoming seaborne trade sanctions and the possible upcoming price cap. Speaking of China, there is a wind of change regarding their strict zero-covid policy. For the first time since the pandemic start, China on Friday announced the easing of some of its extreme COVID rules including shortening quarantines by 2 days for close contacts of infected people and removing the penalty for airlines if there are covid cases amongst their passengers. This will also give a stop in identifying and bringing into quarantine “secondary” contacts of the infected while the close contacts identification remains. But the good news from Beijing does not stop with the Covid restriction easing. On November 11th, Bank of China and the China Banking and Insurance Regulatory Commission announced some extra measures to support the real estate and infrastructure sector of China. The most important one is the extension of the 31st December deadline for lenders to cap their ratio of property sector loans, a measure that has the potential to affect almost ¼ of the China’s total banking loans, giving real estate developers and construction companies the breathing space they need. Analysts expect China to fully reopen in Q2 2023 and along with the stimulus packages to support its fragile economic sectors to have an actual restart of its economic growth. The Chinese appetite for iron ore and steel which is currently poor as steel mills have reduced output will probably gain momentum and iron ore & steel demand will be positively affected by the swift in the Chinese policies, creating some optimism in the dry bulk market for 2023.

Last but not least, Biden’s appearance in Egypt for the COP27 was a way to reaffirm the US's leadership role in the global energy transition. According to the US President, with USD 368 billion on tap, the Inflation Reduction Act (IRA) will bring new investments to clean energy technologies in the US and could influence the global shift towards net-zero emissions. In COP27, Shipping industry is once again at the front and centre in the effort for zero emissions goals with major shipping companies pledging to try various alternative fuels and technologies that will lead to zero carbon emissions. But the data from the fleet analytics and the orderbook analysis show how much ground is needed to cover as only about 20% of the present fleet has adopted energy-saving technologies & the newbuilding orders that adopt alternative fuels are about 33% of the total. Doing our own deeper analysis into the Greek orders, it can be seen if Greek owners are turning towards a greener shipping industry or whether they are still waiting to see what green fuel and technologies will prevail in order to proceed with firm orders of greener vessels. In the Bulker orderbook all the Greek orders are vessels that use conventional fuels. Only 13% in the Tanker orderbook are vessels that can use dual fuels (mainly LNG) while 22% are orders that are alternative fuel ready (meaning that they can easily be retrofitted to use another fuel) and the remaining 40 orders are vessels that use conventional fuels. In the container orderbook most of the Greek orders are vessels that use conventional fuels (53), 14 orders are about vessels that can be easily retrofitted to use alternative fuels and only 2 orders are for vessels that are capable of using other than conventional fuel. Finally in notable contrast, Greek Gas Carrier orders are mainly about alternative fuelled vessels. Over 60% of them, 34 vessels can use alternative fuels, 11 orders are vessels that can be retrofitted in order to use alternative fuels and only 10 orders are vessels that use conventional fuel.

Sale and Purchase:

Another active dry bulk market sale & purchase week, in the Capesize sector, the BWTS & Scrubber fitted “Navios Obeliks” - 181K/2012 Koyo was sold for high USD 29mills to Greek buyers. Moving down the sizes, the Kamsarmax “CMB Partner” - 82K/2016 Tsuneishi Cebu found new owners for USD 29mills, while the 3-year older BWTS fitted “Ocean Rosemary” - 82K/2013 Dalian was sold for USD 21 mills to Greek buyers. The BWTS fitted Panamax “Navios Aldebaran” - 77K/2008 Imabari changed hands for USD 14 mills. In the same sector, Greek buyers acquired the BWTS fitted “Cerafina”- 75K/2005 Hudong Zhonghua for USD 12mills. The Ice class 1C Handysize “Nord Quebec” - 37K/2013 Onomichi was committed at excess USD 17 mills, while the “Manta Cicek”- 32K/2011 Hakodate found new owners for excess USD 15 mills.

In the tanker market, S&P activity is remaining firm, with the Scrubber fitted VLCC “Elandra Denali”- 300K/2020 HHI and the Scrubber fitted “Elandra Elbrus” - 300K/2020 HHI being sold for USD 112 mills each to clients of Bahri. Worth noting that the sister VLCC “Elandra Kilimanjaro” was sold to clients of TEN, back in July 2022 for 95mil USD. The epoxy coated “Hyundai Vietnam S509” - 115K/2023 Hyundai Vietnam was sold for USD 74 mills basis delivery ex-yard within May 2023 and 3-year TC back to clients of CM Lemos. Furthermore, the Aframax “Karachi” - 107K/2003 Imabari changed hands for USD 19 mills. Finally, the BWTS fitted Chemical “MTM Tokyo” - 21K/2003 Kitanihon and the BWTS fitted “MTM Fairfield”- 21K/2002 Fukuoka were sold for USD 22 mills enbloc.

Xclusiv Shipbrokers Inc.

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