Prices for dry bulk tonnage: Find value in the market

ONE lack of correction in the dry cargo market for most of January has led to asset prices retaining their high values. Unlike previous years, where January was usually a “boring” month of shipping, this time was different. As a result, the prices of used tonnage remained fairly fixed.

In its latest weekly report, ship broker Intermodal said that “we have just entered February, Chinese New Year holidays are about to start and the SnP market for bulk carriers is as hot as any seller would dream of. The increased buying interest was evident during September to November 2020, but this was not a surprise as it is somehow a seasonal trend for the dry SnP market to be active in Q4 in every calendar year. What we have not seen for a long time (maybe since December 2013) was non-stop activity in December and January ”.

According to Intermodal’s SnP broker, Mr Costas Hardalis, “this is the interesting part now. For the past 11 years, BDI recorded losses every January to December of the previous year. On average over the above period, BDI has fallen by -26.0% during January, with Capesize leading the decline. This January was different, with the BDI showing a counter-seasonal increase to December (+ 33.3% mother) for the first time since January 2009, when the index had risen by + 21.7% mother. This shift in seasonal dynamics was largely Capesize-driven both in 2009 and now, with Cape 5TC in January 2021 reaching a peak time for January and a 7-year high for any 1st quarter so far ”.

Hardalis added that “since last week in January, BCI has been on a downward trend, with Cape 5TC recently correcting below Panamax and Supramax, but still at relatively high levels for this time of year. With BPI and BSI at multi-year highs for this time of year at 1689 and 1149 points respectively (as of 8 / Feb), buyers’ appetite seems non-stop. Except for Handysizes 28k to 32k dwt, for which the asset value values ​​are relatively lower, all the other variables get significantly higher numbers. The Pana / Kamsarmax SnP market in particular has been very stable. In September 2020, the Panamax MV ELENA II 06’blt was completed with investigation in Q1.2021 to low $ 8 million; in november, MV APOLO sold at the same age for a low base study of $ 9s mile due to 01/2021, and right now MV AJAX at 06 ‘brt was low $ 10s mile again with short-term studies. We also saw similar increases in 12 ‘blt units with MV CORAL AMBER 78k dwt BWTS fitted, which became mid-high $ 14s in December and the sister ship CORAL AMETHYST without BWTS got $ 16 / low 16s mil before the end of January. For younger tonnage with electronic engines built Japanese, we have not seen much activity, the last of which is the sale of MV SAKIZAYA NOBLE blt 17 ‘for $ 25.5 million. With balance in TC, but a potential buyer clearly cannot repeat a deal at the same level. In general, the supply of such modern ships on the market has been limited for some time among sellers who hold back for much better numbers ”.

Intermodals broker added that “moving on Capes, a notable sale, is MV Ocean Compass (180k / 06’blt Japan), which sold in January 2021 to low 17s million, while in September MV Lowlands Erica (176k / 07 ‘blt Japan) was sold for approx. $ 15 million As it is today, with the lack of many candidates open in the market for sales and given all the buying inquiries combined with many unsolicited indications in an attempt to develop private off-market candidates, we would not rule out further price increase if earnings are maintained in the levels we see today. Given that BCI is currently trading at $ 12,000 / day and the Panamax Tess 82 index is trading at $ 15,000 / day, we believe that this cannot be maintained for too long and we hope that CPI will rise and that for a long time expected good market becomes a reality ”, concluded Hardalis.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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