2018 is dubbed to be a crucial year in the balancing of the global fleet growth, both in dry bulk and tanker markets, as ship owners will have to make some tough decisions with a view to benefiting in the long term. However, so far in the year, few deals are reportedly concluded. In its latest weekly report, shipbroker Clarkson Platou Hellas said that “the previous week ended with just a trickle of tonnage of entering the market with only one or two interesting units officially becoming available. However, there is still not enough to fully engage the end users and until then, we cannot say the market has kick-started into life following the winter holidays and returned to firing on all cylinders. There seems, at present, to be no transparency or fluidity in the market environment as a wide price differential is being witnessed between the varied cash Buyers for the same unit (sometimes ranging USD 10-30 per ldt differential), with each having their own idea for where this market is positioned”.
The shipbroker added that “it would also appear that the large and speculative purchases bought at the beginning of the year were not supported by the numbers on offer from the waterfront and it remains to be seen if these units will be sold anywhere near the original purchase price to aide the speculative cash buyers. All eyes are certainly on the tanker sector in view of the freight rates under serious pressure, with one further VLCC having been committed this week. An encouraging number seems to have been acquired, as reported below, although the Owners had to chase the market downwards over several days as optimism certainly changed during the negotiations, and with many more VLCC candidates expected in the market in the near future (some 7-8 such candidates are being discussed), we can only anticipate rates to fall further. These could certainly be interesting, and somewhat intriguing, times ahead for Owners of these larger tanker candidates”, Clarkson Platou Hellas concluded.
Meanwhile, the world’s leading cash buyer, GMS said in its weekly analysis of the market, that it
was “another week and another VLCC sale has already been registered for the year, taking the total number of units sold to 4 (with another two being beached from sales registered towards the end of 2017). This is expected to be an ongoing theme for all of 2018 given that wet charter rates continue to struggle as an excess of mid-to-late 90s (and even early 2000s) built large LDT wet units are due for phasing out and will hopefully bring a touch more optimism to the (wet) freight market. Ever since the rumors started emanating, the anticipated re-opening of the Pakistani market for tankers has made little progress, despite industry insiders repeatedly claiming that positive news on this front is forthcoming. Constant changes of government and key personnel are certainly not helping the local situation and any speculation on a market reopening should be tempered for the time being.
Meanwhile, on the sales front, it seems that certain Cash Buyers are intent on purchasing vessels and perhaps holding on to their inventory, in anticipation of further gains in prices (especially for tankers, should the Pakistan market reopen in the interim) and sales of the last two VLCCs seems to suggest just such an onward sale angle. Bangladesh prices remain comparatively muted for most vessels (including large LDT tankers) being proposed, which maybe a non-event as a healthy number of end buyers are unable to open large value LCs at the currently firmer levels being paid in the industry. Overall, steel plate prices have gained further ground for yet another week in India and the outlook on Pakistan prices for any available dry / container tonnage remains as ebullient as ever. Most will be hoping that this positive start to the year continues as a greater supply of vessels (particularly wet units) are due to hit the market in the weeks / months ahead”, GMS said.
Allied Shipbroking added from its part that “things in the demolition market seemed to have clicked up a gear this past week, with a plethora of demo deals coming to light. It seems as though the price spike that came about with the start of the New Year has helped engage owners and push for a better flow of demo candidates to be moved into the market.. It seems as though the competition noted amongst buyers in the Indian Sub-Continent has helped keep these price levels very much alive and has even allowed for some further improvement against what we were seeing a week prior. It is interesting to noted that for a second week now, we are seeing Indian buyers seemingly “hungrier” for units, while competing relatively well against their neighbors so as to secure as many units as possible. Pakistani breakers seem to still be covering their appetite from the dry bulk space given, driving prices there considerably, while Bangladesh seems to have fallen to a back row seat, showing a presence sparingly”, the shipbroker concluded.
Source: Hellenic Shipping News.