BDI INDEX4

Last week the BDI rate ended up on the green with Capesize sector paving the positive way against weaker activity from the rest of the sizes. Indeed, iron ore flows out of both Brazil and Australia supported BCI with average TC earnings closing the week at the region of $19,000/day. On the Panamax front, tonnage demand for all the reported routes was subdued with declines in rates materializing across both basins leading average Panamax T/C earnings to drop below the $15,000/day mark. Supramax/Ultramax Atlantic market found support on healthy ECSA activity for both fronthaul and transatlantic trips yet with USG tonnage demand lacking strength leading to w-o-w declines for the respective routes. On the Pacific, activity was subdued adding pressure to all routes. As far as the smaller size is concerned, Pacific activity was also subdued, however, a healthier Atlantic market outlook being underpinned by both ECSA and USG exports supported the main index which ended up slightly up last week.

The BDI closed today (5/5/2023) at 1558 points was down by 18 points. BCI closed on Friday at 2384 points was up by 83 points increased with 3.6% w-o-w. BPI closed at 1501 points was down by 85 points decreased with 5.4% w-o-w . BSI was decreased 69 points and closed at 1096 points with decreasing 5.9% w-o-w. BHSI was decreased by 18 points and closed at 645 points with decreasing 2.7%.

SECOND HAND MARKET

The dry bulk sector continued focusing on the Supramax vessels, taking about half of the deals share. The dry bulk market is stabilizing on normal levels, around the five-year average, supporting a healthy but not frantic secondhand sales activity.

Typical Transaction

DEMOLITION MARKET

Last week was a strong one for the recycling market with several deals taking place and the end of the Eid festivities. In terms of freight rates, the bulk carrier market has seen softer rates with the exception of Capes, while the tanker market is falling but still away from levels where scrapping makes sense. India led the way in terms of new business after the Eid holidays, with many deals taking place, particularly for HKC yards. Both local and global steel demand is still weak, which may push breakers to offer lower rates in the near future. Bangladesh is back in the market after the Ramadan and Eid holidays, but L/C restrictions are still in place. The local steel market was closed during the festivities and is worth monitoring over the coming weeks. On the IMF front, the fund is suggesting that the government should not reduce corporate tax rates and should not allow tax exemptions as far as the national budget is concerned. Pakistan continues to face financial constraints and despite the end of the Eid holidays, the country is still out of the market. In Turkey, the market is slower as there is an election in 2 weeks (14 May). The future of the market will be determined by the new policies that will be introduced after the election result. Average prices in the different markets this week for tankers ranged between 340-595/ldt and those for dry bulk units between $330-585/ldt.

Typical Transaction

NEW BUILDING MARKET

The newbuilding market continued to be very active last week with a total of 30 vessels ordered. Once again, the tanker sector saw the most orders with 22 vessels, while the bulk carrier sector was subdued with only 2 vessels ordered. Aframax/LR2 orders have the lion's share of 2023 newbuilding activity - A total of 3.9 million dwt were ordered between January and April 2023, up by 1.0 million dwt compared to the total volume in 2022. Suezmax orders amounted to 3.14 million dwt (2022 volume 1.71 million dwt), while no VLCCs were ordered. Greek owner Dynacom ordered 10 firm and 4 optional 115,000dwt tankers from Dalian Shipbuilding. The owner is paying $63m apiece, with all vessels to be scrubber-equipped and expected to be delivered between 2025 and 2026. Another large order was placed by Japanese owner Nissen Kaiun, who ordered 8 firm 50,000 dwt tankers. All will be Tier III and EEDI Phase 3 compliant, costing $46.3m each and expected to be in the water between 2024 and 2025. In the bulker sector, Union Maritime ordered two 63,000 dwt bulkers for delivery in 2025 at a cost of $32m each.

NB Price Index                                                               Unit M USD

Typical Order

CHARTERING MARKET

SUPRAMAX: Not much reaction after what is often a seasonal bottom during the second half of April. China’s demand for Supramaxes and Ultramaxes remain very low despite reopening and stimulus measures. During this month, China (and India) are expected to increase coal purchases which could be a bullish driver. Elsewhere, there is more vessels being absorbed in the Med/Black Sea region as well as the North Atlantic. However, the major loading countries in Asia and the South Atlantic have on net seen a reduction in vessel absorptions the last weeks.

PANAMAX: Many returning from long weekend holidays, the market was slow to get going. Both basins remained a watching brief with little sign of direction although the early sentiment appeared weaker at first sight.

CAPESIZE: Market improved over the last week with the basket for all time charter routs up by 11%. That said, the last few days has been shakier as the holidays made an impact on the activity. Especially the West Australia to China rout with iron ore has calmed down dramatically and we see weaker demand and sentiment compared to how it looked at the end of last week. On the other hand, North Atlantic is looking firmer with limited open tonnage and the South Atlantic holding.

One Year T/C (USD/DAY)

Typical Deal