Weekly Broker: Volatility keeps deals at bay

Weekly Broker: Volatility keeps deals at bay

The extraordinary volatility within the dry bulk space continues to mute S&P deals. The spot market has seesawed in the past week with current events spooking participants more than actual market fundamentals. Mercifully for owners of large bulkers, demolition action is soaring.

According to Intermodal’s latest weekly report, demolition activity in the capesize segment is up by 186% compared to last year.

“Concerning the muted S&P activity on capes the past four months, it is normal for the decreasing freight rates to cause shipowners to have many concerns about investing in the capesize segment. However, something that should be mentioned along with the muted S&P activity is the asset value’s resistance to decreasing… T/C rates having dropped 35% compared to last year, the values have only decreased by 7%,” noted George Panagopoulos, a research analyst at Intermodal.

According to Ablira’s latest weekly report, news that a court has ordered Vale to halt operations at its Brucutu mine has caused some volatility for capes and despite last week’s improvements, activity is quiet once again. The kamsarmax and panamax markets have remained steady so far this week while period activity in the Pacific has remained at healthy levels. Additionally, fixtures for handysizes have been limited this week.

“A fair amount of activity was to be seen in the dry bulk sector these past two weeks. However, it is worth mentioning the lack of capesize transactions, reflecting the high uncertainty that still prevails for these units in the market. On the other hand, supramaxes continue to hold the main spot light right now, primed by their fairly buoyant performance in the freight market during the most recent slump. Meanwhile, age does not seem to be a significant barrier, with several vessels older than 15 years old changed hands during this past week,” Allied Shipbroking said in its weekly report.

Multiple shipbroking houses including Seasure Shipbroking, Advanced Shipping & Trading and Lion Shipbroking all reported the sale of the 2010 Chinese-built 53,400 dwt supramax bulker Thrasher. The vessel was sold by Eagle Bulk to Indonesian owner Mulyadi Wibowo’s Meratus Line for around $10m.

Intermodal and Advanced Shipping & Trading reported a transaction in which German owner HS Schiffahrt acquired the 2010-built 29,600 dwt handy bulker Redhead (pictured) from Canadian Forest Navigation (Canfornav) for an undisclosed price and the vessel has been time chartered back to the Canfornav.

Broking sources also tell Splash that the 17-year-old, Oshima-built post-panamax Shin Sapporo Maru was sold to Jiangsu Steamship for a price believed to be in the high $8m mark.

On the tanker front meanwhile, Fearnleys in its latest weekly report points out that the VLCC market saw another lackustre week with ships piling up in Fujairah and Galle while owners are currently facing returns well below OPEX for most cargo combinations. It’s on the products side where the action is at the moment, as noted by Allied Shipbroking.

“Things seemed to be heating up on the tankers side as well, with a fair flow of transactions being noted during this two week period. The main focus still holds on the product tanker segments, with several LR1, MR and smaller oil product carriers being changing hands, while even vintage tonnage finding firm buying interest right now,” Allied Shipbroking said.

Lion Shipbroking, Banchero Costa and Allied Shipbroking and Advanced Shipping & Trading all reported the sale of the 2010-built 50,000 dwt MR tanker Unique Explorer. The Japanese-built ship was sold by Chinese owner Unique Shipping to Indian owner Pallonji Shipping for a price of $17.5m.

Allied Shipbroking, Lorentzen & Stemoco and Andreas J. Zachariassen all listed an en bloc sale of two 2004-built 46,000 dwt MR tankers Seaways Ariadmar and Seaways Antigmar. The two South Korean-built ships are said to have been sold by International Seaways to Nigerian interests for over $8m each.

Intermodal and Lorentzen & Stemoco reported a deal that saw Norwegian owner Odfjell sell the 1996-built 10,100 dwt product tanker Bow Querida. Turkish owner Beykim Petrolcülük has acquired the vessel for a price of $2.3m and renamed the ship, Fericek.

According to Braemar ACM Shipbroking, it has been a slightly muted week in terms of concluded secondhand containership sales.

One sale recorded was the 2007-built 1,102 teu boxship Max Centaur, which was sold to Germany-based buyers for $5.7m. The vessel is to enter a long-term time charter with Maersk Line.

“Otherwise in the second hand sector, a number of buyers remain interested in securing post-panamax tonnage and we expect the next trading sales to set benchmarks considerably higher than lost done,” Braemar said.

Alphaliner reported that Bremen-based D. Oltmann Reederei has purchased the 5,624 teu Guang Dong Bridge from Japanese owner Shunzan Kaiun for a price believed to be between $13m and $14m.

Jason Jiang

Jason is one of the most prolific writers on the diverse China shipping & logistics industry and his access to the major maritime players with business in China has proved an invaluable source of exclusives. Having been working at Asia Shipping Media since inception, Jason is the chief correspondent of Splash and associate editor of Maritime CEO magazine. Previously he had written for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week.

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