Pressure on the freight market – Another bad week for tankers

of Anastasia Vamvaka

With the exception of the Capesize sector, almost all ship categories faced pressure in the Atlantic with weak demand translating into weaker profits.

According to a report by the analyst firm Intermodal, slowdowns in activity were also observed in the Pacific market. The BDI closed at 1,503 points on Tuesday, up 63 points from last week’s close.

Argon tankers are plagued by bad weather for another week. BDTI closed at 681, down 4 points and BCTI at 592, up 9 points compared to last Tuesday.

At the same time, the availability of capacity in the crude carrier market continues to weigh on profits and hamper the growth that increased demand could offer.

Despite OPEC + ‘s recent decision to add another 400 thousand b / day to crude oil production, interest rates remained on a downward trajectory with further pressures added by inaction from the New Year’ s holiday in the East and supply – related issues for many OPEC members. , which failed to respond to the increase in oil production in January. As a result, things in the realm of the freight market are not inspiring, with supply / demand mismatches keeping average profits well below OPEX levels.

VLCC earnings averaged $ -16,991 / day, down – $ 1,772 / day. Western market activity gave the negative tone, while Suezmax profits were on average $ 1,949 / day, increased + 652 / day on an annual basis.

The week started with a profit, but charterers quickly managed to turn the table in the Atlantic with the markets of West Africa and the Black Sea witnessing a downward trajectory as the week progressed.

Aframax earnings averaged $ 1,917 / day, down – $ 1,456 / day on average. Limited capacity requirements in both Northern European and Mediterranean markets have led to reductions.

Forecasts for fixed fares at Capesize

Iron ore prices have skyrocketed in the week leading up to Chinese New Year, with traders and producers supplying raw materials.

Iron ore stocks have also skyrocketed as analysts upgrade their forecasts for commodity prices due to another unexpected recovery.

Last May’s record prices fell unexpectedly fast below $ 100 a tonne and now iron ore is once again surprising analysts as it has returned to close to $ 150 / tonne.

Estimates of increased spending on China’s infrastructure are one of the main reasons for the upgraded price forecasts. That is why analysts believe that better and more stable fares for Capes should be at the gates.

Looking at Australia’s iron ore exports to China, it is good to see that they remained strong last month despite rising prices due to a number of factors, such as weather disruptions and concerns about labor shortages.

Ship sales are also steady, with activity in the used car market maintaining its pace last week, and a significant number of tankers and dry cargo changing hands despite the ongoing holiday season.

In the field of tankers, we had the sale of “ATHENIAN SUCCESS” (298,996dwt-blt ’10, South Korea), which was sold to the South Korean owner, Sinokor, for a price of $ 42.5 million. In the dry cargo sector, “HEMINGWAY” (207,634dwt-blt ’17, China) was sold to US-based owner JP Morgan for $ 50.5 million.

January orders closed, with container ships having the lion’s portion. A total of 50 vessels have already been ordered, followed by 13 LNG vessels, 11 bulk carriers and only 2 MR2 tankers.

The same momentum is observed in February, with the containers almost monopolizing last week’s list of new products. Starting with the strongest deal, Zodiac Maritime signed a contract to build 6 15,000 teu LNG ships at DSME for $ 182.7 million each.

The Greek wind is also strong, with Capital Ship Management ordering 4 + 2 optional boxship 7,100teu at DSIC, while the Greek owners Tsakos and Euroseas, (interests of the shipowner No. Pitta) concluded agreements for the construction of four and 2 ships 2,800teu respectively at the Hyundai Mipo yard. Finally,

DSME secured another duo of 174,000 cbm LNG units from the Greek owner Maran Gas, of the Aggelikoussis group. The last order is an option retained from the original agreement of November 2021. The price of the last duet comes with a premium of 12 million ($ 217.5 million vs. $ 205.5 million).

Source: Capital

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