It was a positive week for the dry bulk market that saw increases across the board, while despite the upward movement owners remain numb from the extended weakness of freight rates since the beginning of the year. The BDI today (26/05/2020) closed at 506 points, up by 8 points compared to Monday’s (25/05/2020) levels and increased by 53 points when compared to previous Tuesday’s closing (19/05/2020). With demand across most key trading routes being weak throughout the past days, rates for crude tankers lost further ground, while rates on the period front also took a hit. The BDTI today (26/05/2020) closed at 718, decreased by 100 points and the BCTI at 580, a decrease of 72 points compared to previous Tuesday’s (19/05/2020) levels.
Sale & Purchase (Wet: Stable-/ Dry: Firm+)
Dry cargo sales continue to make up most of recent SnP activity, with the sector having seen another generous number of deals last week, while as far as tanker candidates are concerned, Buyers’ excitement remains reserved relatively to a few weeks back. In the tanker sector we had the sale of the “LANDBRIDGE WISDOM” (308,000dwt-blt ‘19, China), which was sold to Bermuda based owner, SFL Corporation, for a price in the region of $65.0m. On the dry bulker side sector we had the sale of the “CAPE BALTIC” (177,536dwt-blt ‘05, Japan), which was sold to undisclosed buyers, for a price in the region of $10.8m.
Newbuilding (Wet: Stable-/ Dry: Stable-)
It has been an overall generous week in terms of surfacing newbuilding activity, with dry bulk orders having the lion’s share among recently reported deals, which is a rare occurrence nowadays if one considers the sharp decrease shipbuilding interest in the sector has witnessed since before the end of last year. Despite the healthier number of orders below, sentiment in the industry remains soft, with a number of private yards in the Far East that focus on the dry bulk sector expected to keep facing challenges as questionable demand prospects are bound to keep ordering appetite in a tight range. At the same time, even in those cases where investment interest does exists, this is almost entirely absorbed by purchases in the second-hand market, where depressed in many cases values make a good case for a successful asset play. In terms of recently reported deals, Greek owner, Central Shipping, placed an order for two firm VLCC crude carriers (300,000 dwt) at Hyundai HI, in South Korea for a price in the region of $89.5m each and delivery set in 2022.
Demolition (Wet: Soft-/ Dry: Soft-)
With Ramadan still on-going and restrictions across the different demo destination countries still in place despite the relaxation of measures in the past days, sentiment remains soft on the shipbreaking front. Having said that, a number of sales emerged last week but this hardly supported sentiment as most of these concerned deals that previously failed at higher levels. As it was widely expected, prices kept moving down for yet another week, with those cash buyers that are active at the moment easily dictating prices amidst a generous number of demo candidates, while we expect the downward trend to start reversing at least a few weeks after the different markets return to fully operational mode again. Average prices in the different markets last week ranged for tankers between $160-310/ldt and those for dry bulk units between $150-300/ldt.