1 This month the charter market has been a bit quieter, allowing Charterers to rein in the rates somewhat. On the SNP side there is not much in the way of speculave acvity anymore given asset price firmness but quite a few real Buyers for this sort of tonnage are sll making enquiries. Acvity wise we have seen the four Yasa su- ezmaxes sold with two each going to Tsakos and NAT; in addion Tuſton have purchased Koenig & Cie’s 2003 Korean blt sisters “Cape Bata” and “Cape Bowen” . Cape rates have connued to increase and the BCI is now at its highest level since late No- vember last year. This has fuelled the ongoing rise in asset values and sales and purchase acvity in the sector. “Corona Bulker” (180k dwt 2011blt HHI) has been sold to Marmaras Navigaon of Greece at US$33.6m, and is said to have been inspected by 13 pares, we understand that “Blue Cho Oyu”(180k dwt 2011blt Daeh- an) is on subs at similar levels; compare this with the sales of “Geosand Max” (176k dwt 2011blt SWS) at US$27.5m in June and “Blue Everest”(180k dwt 2010blt Daehan – sister to Blue Cho Oyu) at US$27.0m in May and we can see the clear trend in prices. The rise is not restricted to capes however as sales of US$20.5m for the “Asita Sun”(82k dwt 2012blt DSME) and US$19.7m for the “Orion Pride” (81.3k dwt 2011blt Samho) demonstrate – for comparison see the sales of the “Daebo Lumut” (81.4k dwt 2011blt HHI) at US$17.25m last month (albeit at aucon) and “Prabhu Sher” (81.3k dwt 2011blt HHI) at US$17.7m and “Blue Maerhorn” (81.4k dwt 2011blt Samho) at US$17.8m both in April. A tepid recovery is underway in the SH market for STST vessels. Sinochem has reportedly pur- chased the SC Stealth for US$24.5m from Brave Mari- me, higher than previous sales for similar tonnage. The SC Stealth of 19,900 dwt (Fukuoka blt 2007), is the latest vessel sold in the same sub-segment. We currently value a SH5 STST chemical carrier to US$26.5m, which should mean about US$23m for an eight year-old vessel. The higher correspond- ing price paid for the SC Stealth indicates a SH market for STST chemical carriers firming slowly on the improved freight rates this year and the comments made by chemical carrier own- ers of a beer second-half of the year. The ghter SH market for STST chemical carriers also comes as the number of Chinese ship- yards building such tonnage are becoming increasingly limited. In our S&P report for June we wrote that the Danish chemical tanker company Celsius Ship- ping had cancelled its new- building series of STST chemical tankers at Nantong Mingde, acquired by financially strained Jiangsu Sainty Marine Corp. Jiangsu Sainty has since said that it will not financially sup- port addionally Nantong Mingde. There was a fair amount of ac- vity in the S&P market for LPG vessels in July. The Balc Gas (20.500cbm SR, 1994) was sold from Ultragas to an unknown buyer for region US$20m Navi- gator sold the Navigator Mari- ner (20,500cbm SR, 2000) to an Indonesian buyer PNR. The Auteil (3,200cbm PR, 1995) was sold from Lomar to E Marine for US$2m. There were also a few sales for demolion. Syner- gas sold the Syn Markab (4,000cbm SR, 1992) for demo- lion in India at a price of US$485 per lwt. Samsun Logix sold the Korea Gas (4,000cbm PR, 1986) for demolion in Chi- na PNR. Ultragas sold the Lady Stephanie (3,200cbm PR, 1991) for demolion in Turkey PNR. Thenamaris contracted two MGC’s of 38,000cbm at Hyun- dai Mipo for delivery mid-2017 at a price in the region of US$100m en block. HIGHLIGHTS Crude: Less speculave acvity Dry: Rally in rates increasing S&P acvity Chemical: Firming values Gas: High acvity during July July 2015 Dry Crude Chemical Gas Monthly S&P Report -Shipbrokers and consultants since 1919- Hot Hulls
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Monthly S&P Report - lorstem.com · trend in prices. The rise is not ... chemical carrier to US$26.5m, which should mean about ... soften to levels more indicative of the past two
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1
This month the charter market has been a bit quieter, allowing Charterers to rein in the rates somewhat. On the SNP side there is not much in the way of speculative activity anymore given asset price firmness but quite a few real Buyers for this sort of tonnage are still making enquiries. Activity wise we have seen the four Yasa su-ezmaxes sold with two each going to Tsakos and NAT; in addition Tufton have purchased Koenig & Cie’s 2003 Korean blt sisters “Cape Bata” and “Cape Bowen” .
Cape rates have continued to increase and the BCI is now at its highest level since late No-vember last year. This has fuelled the ongoing rise in asset values and sales and purchase activity in the sector. “Corona Bulker” (180k dwt 2011blt HHI) has been sold to Marmaras Navigation of Greece at US$33.6m, and is said to have been inspected by 13 parties, we understand that “Blue Cho Oyu”(180k dwt 2011blt Daeh-an) is on subs at similar levels; compare this with the sales of “Geosand Max” (176k dwt 2011blt SWS) at US$27.5m in June and “Blue Everest”(180k dwt 2010blt Daehan – sister to Blue Cho Oyu) at US$27.0m in May and we can see the clear trend in prices. The rise is not
restricted to capes however as sales of US$20.5m for the “Asita Sun”(82k dwt 2012blt DSME) and US$19.7m for the “Orion Pride” (81.3k dwt 2011blt Samho) demonstrate – for comparison see the sales of the “Daebo Lumut” (81.4k dwt 2011blt HHI) at US$17.25m last month (albeit at auction) and “Prabhu Sher” (81.3k dwt 2011blt HHI) at US$17.7m and “Blue Matterhorn” (81.4k dwt 2011blt Samho) at US$17.8m both in April.
A tepid recovery is underway in the SH market for STST vessels. Sinochem has reportedly pur-chased the SC Stealth for US$24.5m from Brave Mari-time, higher than previous sales for similar tonnage. The SC Stealth of 19,900 dwt (Fukuoka blt 2007), is the latest vessel sold in the same sub-segment. We currently value a SH5 STST chemical carrier to US$26.5m, which should mean about US$23m for an eight year-old vessel. The higher correspond-ing price paid for the SC Stealth indicates a SH market for STST chemical carriers firming slowly on the improved freight rates this year and the comments made by chemical carrier own-ers of a better second-half of the year.
The tighter SH market for STST chemical carriers also comes as the number of Chinese ship-yards building such tonnage are
becoming increasingly limited. In our S&P report for June we wrote that the Danish chemical tanker company Celsius Ship-ping had cancelled its new-building series of STST chemical tankers at Nantong Mingde, acquired by financially strained Jiangsu Sainty Marine Corp. Jiangsu Sainty has since said that it will not financially sup-port additionally Nantong Mingde.
There was a fair amount of ac-tivity in the S&P market for LPG vessels in July. The Baltic Gas (20.500cbm SR, 1994) was sold from Ultragas to an unknown buyer for region US$20m Navi-gator sold the Navigator Mari-ner (20,500cbm SR, 2000) to an Indonesian buyer PNR. The Auteil (3,200cbm PR, 1995) was sold from Lomar to E Marine for US$2m. There were also a few sales for demolition. Syner-gas sold the Syn Markab (4,000cbm SR, 1992) for demo-lition in India at a price of US$485 per lwt. Samsun Logix sold the Korea Gas (4,000cbm PR, 1986) for demolition in Chi-na PNR. Ultragas sold the Lady Stephanie (3,200cbm PR, 1991) for demolition in Turkey PNR. Thenamaris contracted two MGC’s of 38,000cbm at Hyun-dai Mipo for delivery mid-2017 at a price in the region of US$100m en block.
HIGHLIGHTS
Crude: Less
speculative activity
Dry: Rally in rates
increasing S&P
activity
Chemical: Firming
values
Gas: High activity
during July
July 2015
Dry
Crude
Chemical
Gas
Monthly S&P Report
-Shipbrokers and consultants since 1919-
Hot Hulls
2
-Shipbrokers and consultants since 1919-
The Baltic LPG index reached a peak in July with healthy activity in both East and West markets. VLGCs were largely well em-ployed, strongly supported by Indian charterers. Congestion continues to be serious in Indian ports, further strengthening rates.
VLGC
Capesize
VLCC
July continued in a positive trajectory, with the Baltic Dry Bulk Index recovering further to 1131, the Capesize market has been
driven by a lack of available vessels in the Pacific and increasing front-haul trade from Brazil to China.
Capesize Values Capesize- Deliveries and Scrapping
VLGC rates (1 yr TC)
VLCC TCE
After a strong sustained rise in freight rates for the first half of July pressure has fallen a bit in the VLCC market, causing rates to
soften to levels more indicative of the past two months, as demand from Chinese refineries is taken down a notch.
VLCC Values
3
July has been a month of unseasonably good news for the hard-
hit dry bulk market, as the Baltic Capesize Index (BCI) has
strengthened from levels of 1251 to 2116, an increase of 69%.
Whilst still far away from strong earnings levels, the uptick in
rates is pushing the market above the calculated operating and
capital costs for Capesize vessels, a welcome respite for owners
after months of challenging market fundamentals.
Exceptionally high scrapping levels this year (see graph page 4 of
this report) has helped to reduce Capesize oversupply relative to
demand. Demolition has been a driving factor as of late, but
with the rebound in freight rates scrapping activity seems set to
slow down in the short-term.
A positive driver for the segment is the front-haul market of iron
ore from Tubarão, Brazil to Qingdao, China, a route challenged
by the increased activity in Valemax vessels of 400,000dwt car-
rying ore to China. Due to increased activity for Valemaxes as
Chinese port regulations are altered, 40 older VLCCs that were
converted to ore carriers serving this trade could become redun-
dant and prime scrapping candidates, providing further support
for the Capesize segment as the effect of the Valemaxes on mar-
ket sentiment is dampened. This development might mean that
we see a longer-term positive movement in freight rates for
Capesize vessels, including development in indicative indices
such as the BCI.
Any substantial recovery in the Capesize market must currently
be supported by demand from China, as in spite of being on the
rise, Indian iron ore imports still fall short of replacing demand
from the Far East major. Current developments in the Chinese
stock market could however prove a downside risk for the dry
bulk market in general, should firms see a substantial reduction
in equity values which could negatively impact the purchasing
and investment power of an already fragile Chinese construction
and housing market. The Shanghai Composite Index has fallen
by close to 30% since mid-June, and is likely to enter further
bearish territory as we go ahead, in spite of government support
being initiated. Interestingly, iron ore prices do not seem to
have been as negatively affected as expected, and have rallied
from weak June levels. Prices are still low however, which might
further strengthen buyer interest, amidst firming prices for steel
in China.
The combination of asset values that have been under pressure
and a market that seems to be strengthening, is causing us to
upgrade the status of Capesize vessels to ‘hot’ assets in this is-
sue, as we believe S&P activity will increase in this segment and
expect further rate hikes to be seen already in August and Sep-
tember, rather than Q4.
-Shipbrokers and consultants since 1919- Special Report
Capesize—Real Recovery or Dead Cat Bounce?
4
-Shipbrokers and consultants since 1919-
Scrapping
L&S SnP Matrix
Bunker Prices
Dry Bulk Scrapping Scrap Price Developments
Dry Bulk NB Prices (CNPI) Tanker NB Prices (CNPI)
US$ million NB Resale 5 yr 10 yr 15 yr
VLCC 93/98 98/100 78/80 55/57.5 35/37
Suezmax 60/65 68/72 55/61 37/40 20/23
Aframax 50/55 52/56 42/45 29/31 16/20
LR2 52/57 54/58 44/47 31/33 16/22
LR1 43/47 46/48 36/38 23/25 11.5/13
MR 32/35 34.5/37.5 25/28 15/18 9/12
Capesize 43/46.5 41/44 29/31 16/18.5 8/10
Panamax 26/27 20/23 15/18 10/12.5 5/8
Handymax 22/23.9 20/22 15/17 8/11 5/6
x/y
x=China
Y=Japan/Korea
Note: Highlighted boxes indicate actual values in a liquid market, which currently warrants a discount.