Dry Bulk Market’s Recovery in Full Swing

The dry bulk market’s recovery is in full swing, with rates rebounding on a steady pace. In its latest weekly report, shipbroker Xclusv said that “the dry market continues its “counterattack” from mid-February lows. BCI closed at 1,931 points mark, having an increase of 606% since 17 February and 19 daily positive closings out of the last 21. The reopening of China, the increased needs of India and the rerouting of Russian Coal exports because of the War Sanctions have given a great boost to Capesize demand & freight rates. Supramax & Panamax vessels have also capitalised this upward trend, with BPI and BSI up by 112% and 90% respectively within the last 30 days, while BHSI is having a 22 continuous positive daily closings, reaching 694 points but only 58% higher than 15 February low”.

Meanwhile, on the wet market, Xclusiv commented that “the good news keep the BDTI and BCTI in 2023’s highs. China’s diesel exports surged more than 10-fold to 4.54 million tons during January and February from the prior year as domestic demand eased. That’s equivalent to about 574,000 barrels a day, while gasoline exports were 20% higher. Due to the China’s COVID-19 limitations being loosened, OPEC increased its prediction for Chinese oil demand growth in 2023 on Tuesday. However, it maintained its forecast for the worldwide total, citing potential downside risks to global economy. The Organization of the Petroleum Exporting Countries said in its monthly report that the World oil demand in 2023 will rise by 2.32 million barrels per day (bpd), or 2.3%. The banking system turmoil has also affected oil market as oil has fallen to levels not seen since 20th December 2021 due to investors mulling over the banking sector risks, with WTI and Brent crude futures dropping to USD 68/ barrel and USD 74/barrel respectively”.

“As the Q1 is moving to its close, we take a look of Bulk Carrier, Tanker (>=10,000 DWT), Container and Gas segments fleet’s and orderbook’s front and make a comparison with the similar period of 2022. As of 17th March, dry bulk’s total active fleet was 13,202 vessels, with a total of 891 vessels to be on order (6.7% orderbook to fleet ratio). Compared to March 2022, the dry bulk’s orderbook has increased by 19%, whilst the total active fleet is up by 3%. Noteworthy to mention that the fleet over 21 year-old has increased by 10% y-o-y to 1,568 vessels. In the tanker market, the active fleet (>= 10,000 DWT) has rose by 3% to 7,462 vessels, while the total orderbook has decreased by 38% to 334 vessels on order, compared to the same period of 2022, while the orderbook to fleet ratio has plunged from 7.5% to 4.5%. We also witnessed an increase of 21% in the number of vessels aged 21+ year-old, almost 2 and half times more than the current tanker orderbook, highlighting that the tanker fleet is jeopardized to shrink in the following years.

In the Container market, the active fleet accounts for 5,850 vessels and is up by around 4% compared to March 2022, when the fleet was 5,606 vessels. A similar increase has also been noticed in the Container orderbook, as currently accounts for 917 vessels on order, whilst a year ago stood at 791 orders (an increase of 16%). Likewise, to ageing (21+ year-old) Dry bulk’s and Tanker’s fleet, the Containers being over 21 years old constitute a significant percentage of total Container fleet (21%). In the LPG and LNG sector, the active fleet accounts for 2,327 vessels, while back in March 2022 was 2,243 vessels (up by 3.7%). The orderbook has soared by 31% to 475 orders (as back in March 2022 the vessels in order were 362), reflecting an increase in orderbook to fleet ratio from 16.1% in March 2022 to 20.4% currently. It is interesting to note that a significant consistency towards the zero-emission goal is shown in the LPG/LNG orderbook with 90% of these being capable or ready to use alternative fuels. Where can conclude, there is host of 21+ years old vessels, thus we may see a significant increase in the number of vessels go for scrap in the future, with some cases, such as the dry bulk market and the tanker market, the vessels on order do not offset the vessels may be demolished”, Xclusiv concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide