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As we are just fifteen days away from the Chinese New Year

As we are just fifteen days away from the Chinese New Year seven-day public holiday (28 January 2025 to 4 February 2025), the dry freight market is quite "lackluster". The unsuccessful attempts of the Chinese government to boost its economy and revive the real estate sector along with the general underperformance of the Chinese economy before the Lunar New Year have driven the dry Baltic indexes to the lowests levels since the Q3 of 2023. The Baltic Dry Index (BDI) has fallen to 966 points, marking its lowest level since July 25, 2023, when it stood at 962. The Capesize sector, represented by the Baltic Capesize Index (BCI), is hovering at 1,100 points, close to its September 6, 2023 low of 1,034 points. Meanwhile, the Panamax segment isn't faring any better, with the Baltic Panamax Index (BPI) touching 953 points, its weakest position since July 26, 2023, when it registered 916 points. The smaller vessel categories are also struggling, as evidenced by the Baltic Supramax Index (BSI) dropping to 819 points, its lowest since August 16, 2023's 812 points, while the Handysize sector, tracked by the Baltic Handysize Index (BHSI), has declined to 508 points, barely above its August 28, 2023 low of 507 points.
The market's current inability to react has significantly impacted values in the sale and purchase (S&P) market. Prices have moved downwards, but the value of 10-year-old ships have not reached their Q3 2023 levels. They have aligned more closely with prices of vessels 1 to 2 years newer. For example, a 2013-built Japanese Ultramax today is valued higher than a 2011-built Japanese Ultramax was in Q3 2023, but remains close to the price level of a 2013-built Japanese Ultramax from that same period. Given that the freight market is not expected to improve dramatically at least until the end of Lunar New Year celebrations, prices are likely to remain under pressure and may decline further. However, this downturn has not gone unnoticed by owners and investors, with market interest showing a significant increase compared to 2-3 months ago and inquiries on the rise.
Moving from market analysis to efforts targeting the dark fleet, the recent initiative by a 30-nation coalition to review global shipping regulations marks a significant shift in the international community's approach to addressing the shadow fleet phenomenon. This coordinated effort, backed by the EU and Intertanko, represents the most comprehensive attempt to date to tackle a problem that has grown substantially under Western sanctions. On the west side of the Atlantic, the latest round of US sanctions on Russia's energy sector have targeted major players Gazprom Neft and Surgutneftegas, representing a substantial escalation in pressure on Russia's oil industry, encompassing over 180 ships and numerous oil traders, service providers, and insurance companies. This comprehensive approach has already impacted Russian crude exports, which have fallen to their lowest levels since August 2023. The market's bullish response is further amplified by expectations of additional Iran sanctions under the incoming Trump administration, creating a potential double squeeze on the global oil supply. OPEC's ability to compensate for any Iranian production cuts could help stabilize supply disruptions.

S&P Activity
Dry:
On the Kamsarmax sector, the "Pan Clover" - 81K/2012 New Century was sold for low USD 16 mills. The Panamax "K. Faith" - 76K/2002 Sanoyas found new owners for excess USD 6.6 mills. Greek buyers acquired the Ultramax "Omishima Island" - 61K/2013 Iwagi for USD 19.5 mills. On the Supramax sector, the "My Fair Lady" - 50K/2011 Oshima was sold for USD 15 mills to Far Eastern buyers. Last but not least, the Handysize "Brabus" - 28K/2000 Tsuneishi Cebu found new ownership for low USD 4 mills.

Tanker:
On the VLCC sector, the Scrubber fitted "Rolin" - 309K/2005 Samsung was sold for USD 30.5 mills. Bangladeshi buyers acquired the Aframax "Nissos Delos" - 116K/2012 Samsung for USD 45.3 mills, we understand the deal was agreed some months ago. Moreover, the Scrubber fitted CPP LR2 "Suvretta" - 109K/2008 STX was sold for USD 31.5 mills to Chinese buyers. Finally, the MR2 "Oriental Diamond" - 51K/2008 SPP and the "Oriental Gold" - 51K/2008 SPP changed hands for USD 20.5 mills each.

Xclusiv Shipbrokers Inc.