Weekly Broker: Dry bulk and tanker fortunes on divergent paths at start of the decade

Could tanker and dry bulk fortunes be more divergent in the first few days of the new decade? Tankers, led by VLCCs, are massively profitable at the moment, while bulk carriers are going through their normal purgatory twixt Christmas and Chinese New Year.

The deterioration of the dry bulk shipping market has extended with the Baltic Dry Index declining by more than 20% since the beginning of the year to close at a miserable 773 points yesterday. The volatility and uncertainty in the market will continue to affect buyer’s interest in the sale and purchase market. The first week of 2020 has seen softening interest in the dry bulk S&P market with main deals concluded being in the panamax segment.

“On the dry bulk side, we saw buyer’s appetite slow down this past week, with the holiday period playing its part. Few new deals were reported with focus being given to the panamax segment. The declining pattern being noted of late in the freight market has also affected buying interest, with many likely waiting to see if the market manages to rebound quick in 1Q 2020. Prices are expected to play an important role as well in the coming weeks,” Allied Shipbroking said in its latest report.

Both Advanced Shipping & Trading and Lorentzen & Stemoco reported the sale of the 2010-built 75,000 dwt panamax bulker Sudestada. Argentinian owner Interocean committed the Chinese-built vessel to Greek buyers for a price of $11.5m.

Advanced Shipping & Trading and Lorentzen & Stemoco also reported the en bloc sale of four bulk carriers- the 2008-built supramax bulker First I, and three panamax bulkers including 2005-built Three Stars, 2009-built Camelia, and 2004-built Anthos. The vessels have been sold by Greek owner Irika Shipping to US investment firm Davidson Kempner Capital for an undisclosed price.

Anchor Shipbroking reported a deal in which Greek owner Order Shipping sold its 2006 Japan-built 74,200 dwt panamax bulker Georgios S to Vietnamese buyers for a price of $10m.

“On the tankers side, the market remained at fairly active levels as several units changed hands during this past week. Most of the interest was pointed once again towards the product tanker segments with the positive outlook dominating the market. In addition to that, buyers focus spilled over to the VLCC units as well, driven by the hope for further improving demand over the coming months,” Allied Shipbroking said.

Allied Shipbroking reported that Italian investment firm Dea Capital Alternative Funds have acquired two tankers from domestic owners. It has bought the 2010-built 115,900 dwt aframax Neverland Dream from Finaval and the 2008-built 26,000 dwt chemical tanker Korsaro from Martinoli in financial deals for undisclosed prices. Dea Capital debuted in the shipping business in Italy in January 2019 with $200m worth of non-performing loans.

Lorentzen & Stemoco listed a transaction in which South Korean company Woojin Industrial snapped up the 2009 Japanese-built 12,000 dwt chemical tanker Oriental Nadeshiko from Japan’s Daitoh Trading for a price of $10.7m.

There have been no deals to report in the secondhand containership segment this past week.