Ship recycling market still under pressure
The Ship recycling has remained under pressure, despite a few positive signs here and there. In its latest weekly report, shipbroker said that “there feels like some renewed vigour in the market this week on the back of some slight gains from the Indian steel plate markets. Price levels for tonnage giving delivery to India have increased by a small margin, but any gain is welcomed following the recent gloomy months. We are starting to see more tonnage flow into the marketplace, most notably, the smaller container feeder type units, although one larger container (2001 built) was circulated for a recycling sale, but we understand there is reasoning behind this proposal”. The shipbroker added that “Bangladesh and Pakistan look set to stand by the wayside whilst their financial woes continue and so we can expect to see more tonnage conclude to the Indian shores. One interesting point of note this week is from Turkey and the European Union. The European Union announced their new list of approved recycling facilities this week and, as predicted during the October Tradewinds Recycling Conference, two ship recycling facilities in Turkey have been removed from the approved list and therefore only six yards in Turkey are approved.
Tankers end 2022 with 78pc time charter contribution margin and best 2023 outlook
What a difference a year makes! At the end of 2021, container ships were enjoying a historically strong market and freight and time charter rates had yet to peak. At the same time, dry bulk ships were seeing multi-year high rates slipping away, although still enjoying better returns than in previous years. However, tanker ships were seemingly still stuck in a COVID market rut without any immediate hopes for a strong comeback. During 2022, Russia’s invasion of Ukraine in late February has been a key market driver. It led to higher food and energy prices and inflation spiked, especially in Europe and North America. Central banks turned to increasing interest rates to control the inflation that, despite attempts, remains high. At the same time, G7 countries, led by the US and the EU, implemented ever stricter sanctions on Russia. Elsewhere, the Chinese economy struggled under the weight of a strict Zero COVID policy.
Green retrofits to dominate the ship repair market of 2023
Shipyards across Europe, Med and the Black Sea are expected to be fully booked during 2023, as a multitude of projects, many of which will be environmental retrofits, are expected to take place. In its latest weekly report, shipbroker said that “while observing the ship repair market very close to the end of the year, we are confident that shipyards worldwide are entering a new era. The next year, 2023, is going to come with the pandemic being almost completely out of the picture. The effect of inflation on ship repair costs will start being harmonized and balanced after major corrections are made in all aspects throughout the year passed. The altered shipping routes and consequently the increased demand for ship repair facilities in some areas like Europe will finally find the yards ready for more projects. It is obvious that the mentality toward Green Technology adaption is more mature than ever before. We are expecting more projects and trends implementing environmentally friendly solutions and technology.
Tankers to stay the course during 2023
The Tanker market is expected to stay firm during 2023, with both demand and supply fundamentals expected to help the market to remain at high levels. In its latest weekly report, shipbroker said that “12 months ago, we titled our closing report of 2021 ‘A year to Forget’. 2022 has been anything but and summarizing what just happened on one page is no easy feat. Early in January, we then titled a report called ‘Tanker Super Cycle’, where we assessed the likelihood of the tanker market experiencing the same fortunes as the LNG and container markets. We concluded that based on the fundamentals at the time, the tanker market needed a black swan event to trigger its very own super cycle”. According to Gibson, “on the 24th of February, Russia launched its much-feared invasion of Ukraine, and whilst Western intelligence officials had been warning of an attack, few believed Russia would follow through. Ultimately, the war triggered a path of self-sanctioning, followed by oil embargoes and price caps which are redefining oil trade flows on a scale never seen before.
Dry bulk market: capesizes surge forward
The Capesize sector saw a surge, especially in the Atlantic since midweek. More cargo from West Africa came to the market and subsequently pushed the Brazil to Qingdao run to a higher level. However, fixtures were lacking as very limited prompt ballasters could make the loading dates. In the North Atlantic, the transatlantic and fronthaul runs moved sharply higher amid a lack of tonnage in the region. Laycan window and the premium from breaching International Navigating Limits were taken into consideration. Meanwhile, sentiment suggested a year-end push. In the Pacific, the West Australia to Qingdao trade remained fairly active, the route being marked at $8.63 on Friday.
OPEC: tanker rates moved higher in November
The Tanker market continued its upward trend during the month of November, OPEC said in its monthly report, issued this week. Dirty freight rates continued to move higher in November, with strong gains on all monitored routes. Aframax rates saw the strongest gains, as demand was robust as refiners loaded up on Russian crude ahead of EU sanctions. An ongoing shift to longer-haul routes due to trade dislocations also limited tanker availability. Aframax rates on the intra-Mediterranean route rose 43 percent m-o-m in November and were well above levels seen in recent years. Suezmax rates witnessed similar support, with rates on the US Gulf to Europe route up 31 percent m-o-m. VLCCs saw continued steady gains, up around 21 percent on average.