The sentiment regarding the dry bulk market has exhibited a generally positive trend over recent days, primarily driven by increased trade activity in grain and coal. This upswing has provided a foundation for rates in both the Panamax and geared sectors. The Capesize sector, however, experienced a level of stability, as the surplus of available vessels counteracted the robust cargo volume in the Pacific region. Conversely, in the Atlantic region, there was an initial surge in activity for West Africa and East Coast South America routes at the beginning of the week, followed by a decline mid-week. This decline led to a decrease in rates in the region. The rise in Panamax rates can be attributed to a combination of factors, including a notable influx of grain cargoes from ECSA and a scarcity of available vessels for immediate use. In the Pacific region, despite a slowdown in Indonesian exports, both Australia and NoPac routes played a stabilizing role in the overall sentiment. Furthermore, the substantial trade activity in ECSA, coupled with heightened grain exports from the United States Gulf (USG), has also contributed to the favorable performance of geared vessel sizes. Additionally, the limited availability of tonnage in the Pacific region has proven advantageous for owners' earnings.

The BDI closed today (25/8/2023) at 1080 points was down by 157 points. BCI closed on Friday at 1174 points was down by 424 points decreased with 26.5% w-o-w. BPI closed at 1449 points was down by 93 points decreased with 6.0% w-o-w . BSI was increased 29 points and closed at 908 points with increasing 3.3% w-o-w. BHSI was increased by 38 points and closed at 507 points with increasing 8.1%.

On the dry bulk side, in-line with seasonal trends, things were kept on a more quiet mode as of the past couple of weeks, with a noticeably more limited number of units being reported as sold. Reflecting this, there is mostly no direction in trend based on 4-week activity metrics, with momentum in smaller sizes even prevailing slightly on the negative side. That being said, in the past week, more sales involving Capesize vessels appeared which may help overall SnP market pivoting to more fervent territory in the near term.

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DEMOLITION MARKET

The demolition market has seen an increase in activity with a notable number of vessels being sold for scrap. The steel market is picking up slightly, so offer prices are expected to increase. In India, despite the fact that there are no LC restrictions and scrapping is considered easier, Pakistan and Bangladesh are offering better prices. In terms of fundamentals, S&P Global expects the Indian economy to grow by an average of 6.7% to 2031, driven by increased manufacturing and an improved service sector. In Bangladesh, local breakers are offering better prices, but not everyone can get a letter of credit due to limited foreign exchange reserves. As a result, LCs are only available for smaller tonnages. According to the Bangladesh Bank, foreign exchange reserves currently stand at $23.14 billion, which is in line with IMF guidelines. In Pakistan, the LC restrictions are still in place, but some deals have nonetheless marterialised and are awaiting approval. This is a growing problem due to low foreign exchange reserves. Local breakers are also offering higher prices. In Turkey, available tonnage is limited or nonexistent as owners prefer sub-Asian destinations with better prices. Steel production from the beginning of the year to May was down 19%, mainly due to the shutdown of mills following the earthquake earlier this year. Fundamentally, the country is in a position where the local currency is trading near all-time highs against the dollar, while inflation is rising rapidly and currently stands at 48%. Average prices in the different markets this week for tankers ranged between 310-520/ldt and those for dry bulk units between $300-510/ldt.

Typical Transaction

NEW BUILDING MARKET

The previous week witnessed a consistent level of activity in the newbuilding market, a notable occurrence considering the conclusion of the customary, slower-paced summer period characterized by reduced demand for newbuilding projects. However, an intriguing aspect of the orders placed last week is the notable interest displayed by Greek entities in the construction of tanker newbuilding units, particularly focusing on the Suezmax sector once again. To elaborate, a total of six Suezmax tankers were ordered during the past week. Among these, Kyklades Maritime ordered two vessels from JMU in Japan, each priced at $82.0 million. Additionally, Maran Tankers exercised a previously held option at Newtimes Shipyard in China to commission the construction of four LNG-fueled vessels, each with a capacity of 155,500 tons, at a cost of $87.0 million per vessel. Furthermore, Evalend, another Greek maritime company, finalized an agreement with Yangzijiang for the construction of four vessels with a carrying capacity of 75,000 deadweight tons each, at a price of $50.0 million per vessel.

NB Price Index                                                               Unit M USD

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One Year T/C (USD/DAY)

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