By Zisis Stylianos,
With yields of up to 563%, the shares of Greek shipping companies listed on Wall Street are recorded. The Coronavirus pandemic has not significantly affected the dry bulk industry compared to other industries. Castor Maritime stars in stock performance, with Seanergy Maritime, which operates in the Capesize sector, and Navios Maritime which follows in the ranking of high returns.
The gradual recovery of the global economy has triggered an increase in loads of raw materials such as coal and iron ore, as industries have "lit" the "engines" again. For example, steel production (for which iron ore is an essential component) in Asia has increased by 6% in December 2020, reaching 118.6 million tonnes. In China, which is the largest producer in the world, growth in December 2020 was even higher, rising to 7.7%, or 91.2 million tonnes.
As per the world's largest shipowner union (BIMCO), the Capesize cargo ship market is recorded as a "rally" of fares. In the first 20 days of January 2021, 1,427 Capesize business trips were recorded, an increase of 10.4% over the corresponding period last year. According to BIMCO's analysis, among the factors that have contributed to increased transport demand through Capesize tonnage is the increase in electricity production in China, which is mainly fuelled through the use of coal. As a case, coal imports, which are normally carried out by cargo ships such as Capesize units, have increased. The increased demand for electricity is due to the wave of bad weather that has hit the Far East in recent weeks.
Moreover, the International Monetary Fund forecast is pointing to a higher recovery in the global economy in 2021, compared to last October. In particular, IMF estimates that the world economy will grow this year at a rate of 5.5% compared to the 5.2% that it was estimated back in October, while for 2022 it kept unchanged its forecast for growth of 4.2%. In contrast to the global economy, for the eurozone economy, the IMF forecasts a lower growth rate in 2021, namely 4.2% compared to the 5.2% forecast in October, while for 2022 it forecasts growth of 3.6% versus 3.1%, respectively. The forecast for recovery in the United States this year has been revised upward by two percentage points – to 5.1% from 3.1% in October – reflecting a strong momentum in the second half of 2020 and an additional support from the December 2020 fiscal package.
The International Monetary Fund foresees differences in the recovery path of developed economies. More specifically, both the United States and the Japanese economies expected to recover in the second half of 2021 and reach the level of GDP they had at the end of 2019 (before the coronavirus crisis). On the other hand, Eurozone and British growth domestic product is expected to remain lower in 2022 when compared to the levels at the end of 2019.
Chartering (Wet: Stable- / Dry: Firmer)
All dry bulk sectors witnessed w-o-w improvements with Panamax index leading the way (ended the week at the 1,944 points mark) during the past days. The BDI today (23/02/2021) closed at 1,727 points, up by 18 points compared to Monday’s (22/02/2021) levels and increased by 232 points when compared to previous Tuesday’s closing (16/02/2021). With the exception of the Aframax market where w-o-w improvements materialized, earnings for the rest of the sizes in the crude carrier’s market remained subdued. The BDTI today (23/02/2021) closed at 663, an increase of 74 points, and the BCTI at 560, a decrease of 12 point compared to previous Tuesday’s (16/02/2021) levels.
Sale & Purchase (Wet: Firmer / Dry: Firmer)
Healthy activity materialized in the dry bulk secondhand market for another week. Tanker deals were considerably lower compared to the previous week with only four deals coming to light last week. In the tanker sector, we had sale of the “NELL JACOB” (159,999dwt-blt ‘03, S. Korea), which was sold to undisclosed buyers, for a price in the region of $15.7m. On the dry bulker side sector, we had the sale of the “CAPE TRUST” (176,925dwt-blt ‘06, Japan), which was sold to Greek owner, Seanergy, for a price in the region of $17.0m.
Newbuilding (Wet: Softer/ Dry: Softer)
In terms of recently surfacing newbuilding contracts, last week has been quieter compared to the week prior, with most interest in newbuilding vessels still being focused on the containerships sector while no activity materialized for dry bulk and crude carrier units. In the Containership segment, Zodiac Maritime declared an option for four conventionally-fuelled 16,000teu box ships at DSME for a total price of $442.0 million. At the same time, Chinese owners Pan Continental ordered one feeder 1,800teu at Hyundai Mipo for an undisclosed price. In the Gas carrier sector, Trafigura, exercised an option for two dual-fuelled 40,000cmb units at Hyundai Mipo for a price of $52.5 million each and delivery in 2023. Lastly, a 9,000dwt product tankers was ordered by Petrocab at Dae Sun shipyard for an undisclosed price.
Demolition (Wet: Firmer / Dry: Firmer)
The rather expected drop in vintage candidates amidst the Chinese New Year holidays has turned cash buyers into a more aggressive approach as far as their offered bids are concerned, with improved levels being witnessed within the main demolition destinations. An estimated increase of $5 per ldt materialized on average scrap levels of the Indian subcontinent yards, with Bangladeshi breakers remaining the highest bidder followed by the Pakistani and Indian ones. At the same time, improved steel plate prices supported the overall sentiment with breakers ready to exploit Chinese steel demand once CNY will be over. In the West, scrap prices in the Turkish demolition market have been moving positively during the past days inspired by the increasing steel plate prices in the country together with a strengthening Turkish Lira. Average prices in the different markets this week for tankers ranged between 250-440/ldt and those for dry bulk units between $245-430/ldt.
Please note that from now on our reported NB and 2nd hand asset values refer to Japan Blt vessels.
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