NEW DAWN DYNAMICS?

Dry Cargo

Newcastlemax Niche

This week saw another newcastlemax sale, namely “HL FRONTIER” (207,945 dwt / built 2010 Universal, Japan) at region US$ 32.5 mill, which holds up well against the sale of “AMBER HORIZON” (207,993 dwt / built 2010 Universal, Japan) for US$ 33 mill back in November last year with the “HL FRONTIER” now a year older. Although the broader dry bulk segment has weakened considerably from levels in November, the Newcastlemax segment has largely remained stable with the aforementioned sales perhaps only really differing in values because of varying dry-docking positions. This stability stems from key strengths in the segment and prospects such as the opening of iron ore mines in Simandou, Guinea and Vale’s capacity expansions in Brazil, all set to boost underlying iron ore flows. These additional flows from the Atlantic basin leads to 3x longer routings than from Australia to China, which increases tonne-mile demand. Additionally, growing acceptance of larger Newcastlemax vessels at more ports supports the segment, as an increasing share of Cape cargoes are being passed up to Newcastlemaxes. Hence although nearly 18% of the fleet remains on order and nearly 30% of the fleet currently on water being under five years of age, the fundamental robustness of the freight market could largely absorb the growing number of ships hitting the water.
 
On the mid-sizes, post-panamax “CORA OLDENDORFF” (93,005 dwt / built 2012 Taizhou Catic, China) is reported sold for US$ 13.8 mill, which is significantly lower than a similar sale of “POTINA” (93,271 dwt / built 2011 Jiangsu Newyangzi, China) for US$ 14 mill back in November, made more notably when considering the “CORA OLDENDORFF” is scrubber-fitted. Equally in the handysize segment, the sale of “INDIGO MARCH” (38,200 dwt / built 2012 Naikai, Japan) for US$ 13.5 mill stands in stark contrast to the sale of “BLUE DRAGON” (38,238 dwt / built 2011 Imabari, Japan) for US$ 15.2 mill in October last year. The decline in asset values across these segments in recent months mirrors the broader struggles of the dry bulk sector, with only faint glimmers of hope emerging from signs of economic growth and geopolitical turbulence.

Tankers

Fundamentals In The Forge

This week has seen big geo-political moves by the US to try and broker a peace deal between Russia and Ukraine. While this objective is imperative and touted as a ‘sure thing’, diplomacy has turned prickly in recent days perhaps throwing shade on expectations of achieving this quickly, leaving tanker owners keenly waiting for due clarity to emerge in order to fully digest implications for the market. Meanwhile, more stringent sanctions against Iran present an arguably surer bet in the offing. From a cool-headed January we now see VLCC pricing seeming to embody this prediction, noting that the fresh sale of scrubber-fitted “GREAT LADY” (308,930 dwt / built 2005 Samsung, S. Korea) at US$ 41 mill has opened up a US$ 10 mill spread on the early new year sale of the near identical “ROLIN” (308,829 dwt / built 2005 Samsung, S. Korea) at US$ 31 mill, albeit accounting in part for the latter have Special due in October this year as opposed to the “GREAT LADY” due in 2028 and dry-docking in 2026. However, the non-scrubbered “PRINCESS ALEXIA” (306,352 dwt / built 2004 Mitsubishi, Japan) has also reportedly secured a robust US$ 37 mill from Taiwanese buyers, underling this premium that buyers are willing to pay for tonnage of reputable propriety for lucrative compliant trading.

Meanwhile, the MR sector remains effervescent with several sales in the offing, even if values fail to overly excite, with Premuda/Finaval divesting the “PS MILANO” (49,999 dwt / built 2018 Hyundai Mipo, S. Korea) for US$ 37.5 mill to a Greek buyer and the year-younger scrubber-fitted and Tier III “PS SYDNEY” (47,499 dwt / built 2019 Hyundai-Vinashin, Vietnam) rumoured to be closing in on a sale to Vietnamese interests in the low US$ 40s mill range.

S&P Sales

Newbuilding Orders

Newbuild & Secondhand & Prices

Newbuild and Second Hand Benchmark Values ($ million) vs Historical Average Values ($ million)

^ = Chinese price (otherwise based upon Japanese / Korean country of build)
~ = 10-year-old vessel over 10 years (basis standard contemporaneous Dwt/spec for each type).

Recycling

Contact Details

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