In Hellenic Shipping News 02/01/2017
2016 left with a positive feeling for the dry bulk market, which, even amid thin trading, managed to post a quick turnaround. For instance, in the Capesize segment, according to Allied Shipbroking’s latest report, the quick gains were mainly to be seen in the Atlantic as interest prior to the final trading days before Christmas reached a spike and position lists seemed to favor the freight rate spike. Things were also fairly positive in the Pacific, with a good flow of fresh interest helping clear out any open tonnage and pushing strong gains on the average earnings.
Meanwhile, in the Panamax segment, Allied said that “things were not as positive on the Panamax sector, with rates continuing to drop fairly quickly across the board as interest from traders remained subdued, with many seemingly having covered their requirements early on in December. There is a sense that things could start to pick up slightly early on in the New Year, though it is likely we will see some downward pressure on the market from the effects of the Chinese New Year at the end of January”. In the Supramax market, the shipbroker noted that “with activity continuing to soften further, freight rates witnessed a further downward correction though somewhat smaller then the larger Panamaxes were witnessing this past week. Expectations are for a recovery to be seen relatively soon, starting with some firmer interest to be seen in the Atlantic, however this could be a couple of weeks away”. Finally, the Handysize market was “overall a marginally softer market this past week, despite the positive movements being seen in the Atlantic. The increased inquiries and activity out of ECSA and US Gulf seemed to be slightly overwhelmed by the softer interest being seen in the Pacific and Continent”.
NEWBUILDING
Meanwhile, in the newbuilding market, the lackluster performance throughout 2016 was also evident in the closing week of the year, “with the minimal orders reported being representative of what we have seen throughout the year. These past 12 months have been some of the most difficult that shipbuilders have had to face in over 30 years. However it seems that we are far from reaching a conclusion to this saga, as 2017 is expected to at least start on the same note. The difficulties being faced in the freight market for most of the main sectors, along with the considerable market uncertainty and the lacking access to finance, will likely translate into a further prolonging of the new order draught”, said Allied.
In a separate report, Intermodal said that “the silver linings that could signal an improved environment ahead are still absent from the newbuilding market that has been witnessing massive challenges during this year amidst the on-going crisis the industry is going through. The ordering aversion that most owners have been displaying towards newbuildings is not expected to go away anytime soon and particularly for as long as modern vessels are still being priced attractively in the second-hand market and – in the case of the dry bulk sector – rates are not offering much reassurance that a newbuilding investment makes sense. The recent decision of the S. Korean bulker owner, Polaris Shipping, to convert an existing Newcastlemax order to an Aframax one is indicative of the market view adopted even by bigger names in the dry bulk sector nowadays, who appear to be in total disbelief in regards to the potential returns a dry bulk newbuilding investment will eventually yield and opt to put their money into other sectors instead. In terms of recently reported deals, Greek owner, Maran Gas, placed an order for one firm FSRU (173,400 cbfm) at Daewoo, in S. Korea for a price in the region of $590.0m and delivery set in 2020”, said the shipbroker.
In the S&P market, Allied said that “on the dry bulk side, the Christmas holidays seem to have taken their toll on activity, with the week closing off with a significant drop in reported transactions compared to previous weeks. Buying interest seems to have also waned, as most investors take a pause to see the direction the market will take in the first weeks of the New Year which will seem crucial in dictating the tempo the rest of the fisrt half of the year will take. On the tanker side, activity seemed to be slightly firmer then it was a couple of weeks prior, however it is here too that we will likely see a drop in activity over the coming days as the days close to the Christmas holidays and New Year tend to be slightly sluggish, especially during a period were the freight market is not showing any great signs of exuberance”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide
