Shipping Markets Still in “Holiday” Mode

The start of the New Year has been, as expected, rather lackluster for the shipping market. In its latest weekly report, shipbroker Fearnleys said that “it’s been a lackluster start to the New Year in the VLCC segment and lack of fresh enquiries and transparency is weighing on the sentiment. The change in WS flat rates, considerably up from last year, is exacerbating the picture rather than improving in it. However, daily earnings are still ranging from low USD 30’s and into the USD 40’s/day for the most modern scrubber fitted units. TD3C is probably not more than WS 67.5 in 2022 “money” at the writing moment and will be further tested. But, although further downwards pressure persists owners will likely resist dragging things down to last year’s lows”.

Meanwhile, “this week the Suezmax market has been a tale of two hemispheres. In the East, rates have rebounded on the back of a very busy first decade for 20-ton crane requirement which has considerably trimmed the early side of the list for the second decade meaning that MEG/China is likely to trade around the WS 190 level whist TD23 is WS 90 with a firmer feel. The Atlantic basin is proving not to be as fruitful with lists well stocked for all load-zones against a backdrop of very little surface activity. TD20 is in danger of slipping into WS 120’s territory unless we see an influx of sustained activity today. The one silver lining is the Med’ Aframax market which is beginning to take a bite at Suezmax tonnage, but this is unlikely to yield bumper returns for owners, but it may stop the rot. All rates basis 2022 WS”, the shipbroker said.

“Aframax rates in the Nsea have been under constantly downward pressure over xmas and at the start of the new year due as a lot of cargoes been covered on own relets. Going forward we expect rates to continue sideways, but with a softish undertone as charterers could combine Nsea stems by lifting cargoes on either Suezmax or VLCCs. In the Med/Bsea, rates seem to have hit the bottom after losing about 200 points during the last two weeks. Charterers fixing forward, vessels ballasting away and being fixed for long-haul runs have shrunk the tonnage list for normal fixing window. We expect rates to move sideways with a positive note for next week, however Suezmax could possibly limit any upward pressure by capping Afras and fixing part cargoes”, Fearnleys concluded.

Meanwhile, in the dry bulk market, “after a relatively inactive Christmas period in terms of fixing activity, the year starts off with rates coming off; for the c5 West Australia route, levels are in the low 7s and c3 well below the 20 mark. Average Cape index is presently 12,500, more or less as expected. We are looking forward to a new year, where expectations to the first part are rather low, whilst the general sentiment is rather positive to the second half of the year. It’s normal for market activity to be slower after holidays, as many people are returning to work and may not be fully back in the swing of things yet. First index day 3 of January is showing a negative market with little activity”, the shipbroker said.

Fearnleys added that “the mixed market for Supra and Ultra segments with rates obviously slowed down in both basins. Last week we saw an improvement in the Pacific due to the substantial volume of cargo ex-Nopac and ex-Australia submerged and helped to maintain steady earnings. This week Europe is still partly on holiday and the upcoming Russian Orthodox Christmas, adds to limited trading. We see rates falling in all basins. All major loading areas in the Atlantic lack cargo inquiry. The Continent and Baltic region suffer the most due to the cold weather and limited cargo volume ex Russian territories. Ultramax fixed with grain cargo delivery Continent to West Africa at USD 15,000 pd. USG and USEC is stable with rates slightly down from last weeks; mv Seaboss 55,426 dwt dely SW Pass prompt trip via Mississippi River redely Morocco USD 19,750 pd”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide