Clarksea index moves 35pc above trend
Clarkson Research’s six monthly outlook for the global shipping markets, Shipping Review & Outlook, has today been released and is available on Shipping Intelligence Network. Summarising the review, Steve Gordon, Managing Director of Clarksons Research commented:
Shipping markets are experiencing an extended period of positive market conditions, with our cross-sector ClarkSea Index averaging $24,000/day in the first quarter, up 35 percent on the 10-year trend and maintaining the strong levels of 2023. Aside from underlying trade volume growth and a tight shipbuilding market, complexities in supply and demand continue to impact including from geo-political disruption to trade patterns and increasing emissions regulation.
Dry bulk second hand sales grew by 35pc
Demand for dry bulkers remained strong during the first quarter, as shown by the increase in the number of deals reported. In its latest weekly report, shipbroker said that “during the first 3-months of 2024, dry bulk S&P activity was brisk, with over 220 vessels changing hands. This represents a nearly 35 percent increase compared to the same period in 2023, approaching the volume recorded in Q1 2021. Handysize, Supramax, and Capesize sectors have been the stars so far this year, with 43, 55, and 31 sales respectively (constituting around 19 percent, 25 percent, and 14 percent accordingly out of the total of bulk carrier sales)”.
According to the shipbroker, “surprisingly, the Capesize sector has experienced the strongest Q1 in terms of sales, of at least the last 10-year period, despite the increase in the second-hand prices. Within the past year, Capesize second-hand prices have realised the greatest increase compared to other segments, with the 5-year, 10-year and 15-year-old prices climbing by 21 percent, 35 percent and 39 percent respectively.
Ship recycling market shows mixed performance
The Ship Recycling Market has had a mixed week. In its latest weekly report, Best Oasis (www.best-oasis.com), one of the world’s leading cash buyer of ships, said that “the ship recycling market across India, Bangladesh, Pakistan, and Turkiye presents a mixed landscape. In India, market conditions have shown volatility, initially marking an improvement but facing a downturn as the week progressed, potentially influenced by the Holi festival’s impact on market sentiment”.
Dry bulk coal flows to China saw an increase in Australian coal
China reduced its intake of Russian coal during the first quarter of the year, while Australia saw a surge in its export volume compared to the previous year’s lows, particularly noticeable in the January to March period.
In the closing days of March, there has been a discernible softening of momentum in the Capesize Brazil to North China rates, following an upturn recorded in the previous week. Nevertheless, the recent momentum remains notably firmer than levels observed a month ago. Notably, the larger vessel size categories continue to exhibit strength, with a continued decrease in the number of ballasters for Capesize and Panamax vessels in Southeast Asia and Africa.
East Mediterranean hubs suffer as Red Sea crisis persists
The Re-routing of mainline vessels via the Cape of Good Hope has resulted in a steep downturn in vessel call capacity across East and Central Mediterranean hub ports, but West Mediterranean ports have shown more resilience.
With no resolution to the security situation in the Red Sea, carriers continue to divert mainline vessels trading between Asia and Europe via the Cape of Good Hope.
South Africa’s iron ore exports stabilized in 2023
South Africa, one of the major exporters of iron ore, managed to halt the decline of the past few years, during the course of 2023. In its latest weekly report, shipbroker said that “2023 was a very positive year for global iron ore trade. In Jan-Dec 2023, global loadings of iron ore increased by +5.1 percent y-o-y to 1,631.9 mln tonnes, from 1,552.2 in the same period of 2022, based on AXS Marine vessel tracking data. The trend remained positive in JanFeb 2024, with loadings growing by +5.4 percent y-o-y to 255.7 mln tonnes. Exports from Australia actually declined by -4.6 percent y-o-y in Jan-Feb 2024 to 137.0 mln tonnes. From Brazil, exports surged by +24.8 percent y-o-y in Jan-Feb 2024 to 56.4 mln t. India also saw an increase of +48.5 percent y-o-y in Jan-Feb 2024 to 11.1 mln t. From South Africa volumes increased +4.4 percent y-o-y at 9.0 mln t in Jan-Feb 2024. From Canada there was a +5.8 percent y-oy increase to 8.4 mln tonnes.
Baltimore bridge collapse: potential for significant supply chain disruption
The Francis Scott Key Bridge in Baltimore has collapsed after it was struck by a container ship at around 1.35am ET.
The container ship involved is the Singapore-flagged Dali which can carry just under 10 000 TEU (20ft shipping containers) and was operating on a 2M alliance service between Baltimore and the Far East.
Emily Stausbøll, Market Analyst at Xeneta – the ocean freight shipping rate benchmarking and intelligence platform, said: “This is a tragic and extremely serious mass casualty event and our thoughts are with all those people involved.
Scrutiny of scrubber discharge practice intensified
In its latest weekly report, shipbroker said that “in light of Denmark’s contemplation of a ban on scrubber washwater discharge, an assessment of the global stance on exhaust gas cleaning systems is paramount for stakeholders in the shipping industry. Scrubbers, introduced to align with IMO’s sulfur emissions regulations, have been instrumental in allowing ships to continue using HSFO by cleaning exhaust before it is released into the atmosphere. However, the washwater discharged, particularly from open-loop and hybrid systems, raises environmental concerns due to its content of harmful substances like polycyclic aromatic hydrocarbons and heavy metals, associated with significant risks to marine life”.