In Hellenic Shipping News 01/05/2015
Dry bulk owners are looking for trades which could fare a bit better in the long term, as the market is still reeling from a shift in trading patterns, as a result of China’s shift in economy. According to the latest weekly report from shipbroker Intermodal and more specifically, the shipbroker’s Shanghai office, “the latest figures of China’s slowing down imports of coking coal for the first quarter of the year are coming to confirm what everybody was expecting to see, since the government has been actively supporting the country’s shift to using cleaner energy resources. Australia is currently the major producer who suffers from this slowdown of Chinese imports; however the land Down Under still remains the main supplier of coking coal for China”, said the shipbroker.
It added that “during the first quarter of the year, the total import of coking coal was 10,92 mil mt, a figure that represents a drop of 16% compare to the last quarter of 2014. It is worth mentioning that the imported quantity during March was reduced by 21% compared to the same month last year and 26% compared to February 2015”.
Meanwhile, “on the other hand, according with China’s custom reports, China imported 80,51 mil mt of Iron Ore in March 2015 which is a substantial increase of 8,85% compared to last month. In total, China imported 23mil mt of Iron ore during the first quarter of the year, which is higher by 2,4% compared to the same quarter in 2014. Despite this uptrend in iron ore imports fundamentals still remain somewhat challenging for the trade, as demand of steel in the local market is still not meeting expectations of a healthy market with end users still lacking positive sentiment for the market going forward, which in turn translates into cautious purchasing”, Intermodal’s report noted.
It added that “together with the above negative prospects comes the poor freight market of the last six months, which drove many Chinese Ship Owners to divert their interest from mid 90’s Panamax vessels to smaller tonnages and especially to mid 90’s Handymaxes. That new demand came together with some Middle East interest, which managed to raise this specific market around 10%. According to the last done, a Japanese 95 blt Handymax with SS/DD due should be in the region of USD 4,25mil, while a couple of months ago it was reported at around USD 3,8mil”, said the SnP team in Intermodal’s Shanghai office.
It went on to note that “on the other hand in the mid – high 90’s Panamaxes every last done comes in lower levels than the previous one. It is worth mentioning, that Panamax tonnages presently circulating in the market, are significant more than any other dry bulk size segment and their price ideas are related to their demo value plus some premium always depending on the exact age of the ship. For the younger/modern Panamax/Kamsarmax tonnages, activity remains high with many Greek buyers inspecting/offering, however most Sellers, especially Japanese, are still holding back as they are not considering the low levels they see, expecting an improved market in the near future, which hopefully will come soon on the back of this extended period of poor freight rates ending”, the shipbroker concluded.
Meanwhile, in the demolition market this past week, Intermodal noted that “after a few weeks of an improved market across the Indian sub-continent, prices appear to have now stabilized for wet tonnage, while bids for dry bulk candidates closed off on Friday slightly increased after giving up a portion of the upside noted in the beginning of the week. The market remains overwhelmed by the increased number of demo candidates as owners have been trying to take advantage of this recent positive correction, which in itself could be partially obstructing a bigger improvement in prices. The trend of large sized dry bulk vessels heading for scrap remained strong for yet another week, with a few more Capes being reported sold at price levels which in some cases exceeded $400/ton. At the same time, the Indian market is still playing catch up with the rest of the subcontinent, lagging behind in the race to snap some of those higher ldt candidates, as both the depreciation of the Indian Rupee as well as the problematic local steel market remain a challenge for breakers in the country. Prices this week for wet tonnage were at around 230-420 $/ldt and dry units received about 215-405 $/ldt.”, it concluded.
