BDI INDEX

The return from the CNY holidays has yet to deliver any meaningful recovery on the dry bulk market for another week. With an increase of 13.3% wo-w the Capesize average earnings ended up at the unhealthy level of $4,033 per day. The sentiment was uninspiring for the rest of the sizes as well, with all routes closing the week with discounts with the exception of the Pacific Handysize activity where owners managed to increase their market share albeit at weak levels. Looking forward, we should keep monitoring Chinese demand recovery and to what extent improved sentiment will affect seaborne activity in March. However, given the volatility that prevails in the paper market, optimism remains reserved for a strong spike in rates with the concern now being whether the bottom has been found or there is further room for declines in February.

The BDI closed today (12/2/2023) at 602 points down by 19 points. BCI closed on Friday at 486 points up by 57 points increasing with 8.8% w-o-w. BPI closed at 864 points down by 76 points decreasing with 8.1% w-o-w . BSI decreased 54 points and closed at 628 points with decreasing 7.9% w-o-w. BHSI increase by 0 points and closed at 436 points with increasing 0.0%.

SECOND HAND MARKET

Last week moved very close to the week before, with a similar number of transactions occurring in the secondhand sales market. In the dry bulk sector, we saw a minor uptick in the smaller sized vessels, with Handysizes starring in the type of vessels changing hand. Still, amidst a stagnant freight market, current appetite in dry bulkers remains anemic.

Typical Transaction

DEMOLITION MARKET

The market in general is firmer as there are increased flows of tonnage for breakers, with India still being the top destination, as Pakistan and Bangladesh are having financial problems and Turkey is devastated by two huge earthquakes and the humanitarian crisis that followed. The increased tonnage is mainly from containers and bulkers as rates are dipping after the Chinese New Year festivities. In India, the budget announcement by the government did not boost steel prices as expected while breakers' offers were stable w-o-w. In Pakistan, the government and the IMF still cannot reach a deal and thus the country is out of the market. Local breakers are trying to acquire credit lines via Middle Eastern banks while the USD/PKR is at 267.02 supporting the steel price rise. In Bangladesh, the financial situation is slightly better than Pakistan. Only selected breakers can open L/Cs and despite the demand that exists, the restrictions lead owners to India. Talks between the IMF and government are for USD 2 - 3 billion, but more money is needed and local breakers are hoping for resolution, to benefit from the increased prices. In Turkey, the devastating back to back earthquakes caused a humanitarian crisis pushing local breakers to the sideline for now. Average prices in the different markets this week for tankers ranged between 310-555/ldt and those for dry bulk units between $300-545/ldt.

Typical Transaction

NEW BUILDING MARKET

During the past few days the number of materialized newbuilding contacts that came to light was low with only three deals taking place while no container and LNG deals were recorded. More specifically, the Swiss based Advantage tankers ordered three scrubber fitted dual fuelled 158,000 dwt tankers from the Daehan Shipyard, due to be delivered in 2025. The price is reported at $79.0 million each. The UAE Emepco FZE ordered four 80,000 dwt tankers from Haidong shipyard in China and they are expected to be delivered in 2025 and 2026. On the bulkers front, the Japanese Doun Kisen concluded a deal for the construction of two 40,500dwt units at Nantong Xiangyu for an undisclosed price.

NB Price Index                                                               Unit M USD

One Year T/C (USD/DAY)

Typical Deal