Weekly Broker: Dry bulk market spooked into inaction

Weekly Broker: Dry bulk market spooked into inaction

The Chinese New Year holidays together with the already negative sentiment prevailing across the market resulted in further pressure for the dry bulk market last week, with the BDI sliding down to a 28-month low. It has finally hit a floor in the past couple of days to hover just above 600 points nevertheless the market remains spooked which has seen the appetite for bulker acquisitions drop off a cliff. Tanker bargains however have helped fill the void over the past week.

“Despite the additional discounts, the first positive reaction for panamax rates was already seen last week, while average earnings for the smaller sizes have also been steading and moving upwards during the past couple of days. On the other hand, the capesize market still appears unable to shake off the pressure that has been amassing following the dam disaster in Brazil, with uncertainty in regards to when activity for the big bulkers will start picking up expected to keep affecting market sentiment overall in the following days as well,” Intermodal said in its latest weekly report.

According to Intermodal’s indicative market values, the past month has seen prices for bulk carriers in all segments drop. The average price for a five-year-old 30,000 dwt handysize bulker decreased by 3.2% from $13.7m to $13.3m since the middle of January while the average price for a five-year-old panamax experienced a drop of 2.3% to $16m.

Alibra’s latest weekly report states that the current unresolved situation in Brazil where miner Vale is in trouble for a dam collapse has led to increased uncertainty for capesizes and the period market has remained under pressure while owners are not willing to enter into period agreements for panamaxes and kamsarmaxes also.

“On the dry bulk side, things have been excessively quiet these past few days, with the S&P market having regressed back to patterns last noted in mid October. Meanwhile, the disappointing levels of earnings being posted now, hasn’t left much space for optimism amongst buyers. Notwithstanding this, given that we expect a part recovery to take shape relatively soon, we may well see some renewed interest amongst buyers take shape over the coming weeks,” Allied Shipbroking said in its latest weekly report.

Intermodal and Allied Shipbroking reported the sale of the 2017-built 62,000 dwt ultramax bulker Adventure I. The Japanese-built vessel is said to have been sold to Greek interests for around $24.5m.

Multiple shipbroking houses listed the sale of the 2003-built 46,000 dwt handymax bulker Paradise Bay. Singapore’s Pioneer Marine sold the ship to undisclosed interests for a price of $9m.

“On the tanker side, activity was sustained at relatively fair levels, with buying appetite seemingly ample for the time being. Here, the dominant presence of the MR segment as a share of the total S&P volume concluded was once again the highlight of the week. All-in-all, despite the small downward freight rate correction of late, the positive sentiment continues to hold and acts as a major driver for the secondhand market right now,” Allied Shipbroking said.

Splash has already reported two en bloc sale and purchase deals in the tanker sector in recent days. Pakistan National Shipping Corporation (PNSC) acquired two LR1 tankers Kings Road and Abbey Road from Eyal Ofer’s Zodiac Maritime, while Oslo-based Atlantica Shipping took over a pair of 2007-built MR1 product tankers Krisjanis Valdemars and Kandava from Latvian Shiping Company.

A number of shipbroking houses reported the sale of the 2008 South Korean-built product tanker Conti Humboldt to German interests while Intermodal identified the buyer as Nordic Hamburg. The 37,600 dwt vessel is sold by Reederei NSB for a price of $11.5m.

Mutiple shipbroking houses all reported the sale of the 2004-built 37,000 dwt handy tanker Axelotl. The South Korean-built vessel was sold by Greek owner Product Shipping and Trading to Indonesian interests for a price of around $7.3m.

Allied Shipbroking and Lorentzen & Stemoco both listed the sale deal of 2008 Japanese-built 106,000 dwt aframax tanker TH Symphony. The vessel was sold by Japanese owner Nissen Kaiun to German bank Nord/LB for an undisclosed price.

The secondhand containership sale and purchase market has seen a few deals come to light over the past few days.

Cyprus Maritime have been reported by Braemar ACM Shipbroking as the buyers of the 2006-built 5,044 teu Herma P. The vessel was sold by the controlling bank for a scrap level price.

Alphaliner reported that Cypriot owner Mastermind Shipmanagement acquired the 2008 Chinese-built 618 teu MCP Rotterdam from German owner Hartmann for an undisclosed price. The vessel has been renamed Blue Ocean.

Jason Jiang

Jason worked for a number of logistics firms following his English degree, then switched this hands-on experience to writing and has since become one the most prolific writers on the diverse China logistics industry writing for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week. Jason’s access to the biggest shippers with business in China has proved an invaluable source of exclusives.

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