BDI INDEX

During February the sentiment in the dry bulk realm remains subdued. The Capesize sector continues to pave the negative momentum followed by uninspiring activity across both the Panamax and geared sizes segments. ECSA's weak Capesize demand is facing an oversupply of vessels which is further eroding rates in the Atlantic. Panamax rates also declined across all routes with a more promising sentiment emanating from Indonesian and Australian stems, however, the abundance of units is fading any potential improvement in earnings. On the geared sizes front, Supramax saw its rates being increased last week with USG tonnage demand underpinning Atlantic's positive performance. Both Fronthaul and Transatlantic trips (S1C_58 and S4A_58) increased by $2,971 and $2,904 per day. Period-wise, owners’ interest is focused on short-term contracts yet with limited fixtures taking place during the past days

The BDI closed today (26/2/2023) at 883 points up by 281 points. BCI closed on Friday at 636 points up by 150 points increasing with 30.9% w-o-w. BPI closed at 1271 points up by 407 points increasing with 47.1% w-o-w . BSI increased 368 points and closed at 996 points with increasing 58.6% w-o-w. BHSI increase by 69 points and closed at 505 points with increasing 15.8%.

SECOND HAND MARKET

Last week has seen a significant pick-up in secondhand sales activity, with transactions returning to more normal levels. In the dry bulk sector, an en-bloc sale of six VLOCs was the main protagonist, with buying appetite shifting away from smaller vessels. One possible explanation could be the long-awaited recovery of the dry bulk markets, and the expectations economics will improve further into 2023.

Typical Transaction

DEMOLITION MARKET

The demolition market is showing signs of strength with a healthy amount of materialized deals coming to light last week while a notable volume of the respective units have been destined for Bangladeshi breakers whose offers now lead the pricing board. In India, the country's trade balance showed a deficit of $17.7 billion, a 12-month low, mainly due to a 15.8% monthly decline in imports and a 13.4% decline in exports. The local steel market remains strong and billet exports fell as prices are under pressure from other players such as Russia and China. In Bangladesh, the central bank's decision to cut interest rates benefited the foreign exchange market as foreign exchange holdings rose to $3.17 billion last week from a low of $1.9 billion in October. As a result, the taka is finding some equilibrium in the region of 106.22 against the dollar. There are hopes that the financial restrictions will be eased in March or April 2023 and this is giving hope to the market, although nothing is official yet. In Pakistan, the government introduced a new tax amendment and increased the Goods and Services Tax, which was essential to avoid default and also to meet the IMF's requirements to get the $6.5 billion loan package while the Pakistani rupee is trading at 261.68 to the dollar showing some de-escalation. In Turkey, the earthquake has kept the region's major steel mills closed for the time being and is expected to remain so for almost a month. Local billet prices are rising on the expectation that the government will buy up volumes to rebuild the quake-hit regions. The lira stands at 18.87 to the dollar. Average prices in the different markets this week for tankers ranged between 310-580/ldt and those for dry bulk units between $300-565/ldt.

Typical Transaction

NEW BUILDING MARKET

The newbuilding market activity improved last week with a total of 31 units being ordered while owners' interest was split across all types of sectors. Tanker orders were on the rise, with 6 vessels being ordered which concerns exclusively product carriers units. On the container front, methanol fuelled units continue to attract owners' interest. French giant CMA-CGM ordered a further six 16,000 TEU methanol-fuelled ships, following on from its order for twelve similar vessels two weeks ago. South Korea's HMM ordered a total of nine 9,000 TEU methanol-fuelled boxships, seven of which will be built at Hyundai Samho and the other two at HJ Shipbuilding & Construction. Bulker orders also emerged last week with three deals materializing, while it is interesting to mention that Greek owners have the lion's share of the conventional type of sector contracts with three out of the total six tanker/bulker deals being destined to Greek buyers.