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Last updateΠαρ, 03 Δεκ 2021 6pm

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Xclusiv Shipbrokers Inc.: latest Weekly S&P Report

Bulk carrier 1

As the Dry Bulk market enjoys its best market for over a decade, we are motivated to observe asset prices in equally firm moments in recent dry bulk shipping history. Specifically, on 7th October 2021, the BDI attained a 13-year high at 5,650 points. The last time BDI (yet, with a different underlying synthesis) was at similar levels was on the 5th September 2008, when it had been correcting from its all-time high of 11,793 points on 20th May 2008. Observing the BDI even earlier, we notice that on 3rd February 2004, the BDI was at similar levels to today, during its ascent to glory back then.

Limiting attention to Supramax asset values within the dry bulk space for simplicity purposes, the September 2008 levels easily outnumber the respective equivalent 2021 and 2004 asset values, since they had incorporated the irrationally exuberant pricing of the ultra-firm 2007-2008 years while a notable time lag prevailed during 2008 between the timing earnings corrected and until asset values represented such correction. Leaving 2008 aside, by comparing asset values of Feb '04 vs Oct '21, we observe that, interestingly, they are somewhat comparable/correlated. One can also notice the substantially higher NB pricing of today vs '04.

Oil Tanker's "Supramax counterpart", in terms of deadweight & versatility of carrying cargoes/trading routes, the MR2, is under increased interest & speculation lately for several reasons. On the supply side, finally we have a decent scrapping year with about 29 MR2s having been scrapped 2021-YTD (vs 8 MR2s in the whole of 2020 and 13 MR2s in 2019). The respective NB orderbook is composed (well below 10% of the Fleet) while the NB pricing flirts with rgn $40m levels in S. Korea for the 1st time since 2009 which, along with regulatory/technological uncertainty and post-2024 delivery positions, will discourage many ship-owners from placing orders. The shrinking orderbook bodes well with an increasing number of 15+ year-old MR2 units. The product tanker transportation demand side, although it has been disappointing throughout Covid era, now entertains cautious optimism fueled by the exacerbated energy crisis. The shortage of natural gas, LNG and coal supplies will inevitably catalyze demand for oil and generate oil products demand, which the owners of oil (product) tankers would be pleased to cover. Such increase in oil products demand may be, in turn, constrained by energy crisis within the energy industry per se, with refineries not having energy to process.

Despite the real asset inflation nowadays, from the table below we notice that especially the 10y-old & 15y-old MR2's are below their historical average prices. Especially studying the 15y-old MR2 pricing, we notice that even in depressed asset markets, they tend to maintain a strong resistance in the rgn $9m price level, close to a $4m+ premium over scrap. Thus, one may consider 15y-old acquisitions at rgn/max $10m as quite conservative, providing with upside potential should demand pick back up.

Sale and Purchase:
Maintaining momentum on dry secondhand activity, with larger in size and modern units being the main preference of buyers. The Capesize "Cape Garland"–178K/2009 Mitsui sold for USD 32.5mills to Chinese buyers. It is worth noting that last week we had reported the sale of the 3-year younger Cape "True Endurance"-179K/2012 HHI for USD 32.5-33mills. The Kamsarmax "Lena B"- 82K/2017 Tsuneishi Zhousan, was sold to Asian Buyers for region USD 35 mils, while the Kamsarmax "Ibis Wind"–83K/2013 Sanoyas changed hands at USD 28.1mils. On the Panamax segment, clients of TMS paid for xs USD 30 mills to acquire "Orient Violet"-77K/2015 Imabari. Ultramax "Daniela Oetker"–61K/2015 Shin Kurushima, was sold to Meghna group of Bangladesh for rgn 29.8mills. The 6-year-old handysize "Xing Ning Hai"-34K/2015 Namura changed hands for USD 23.1mills.

On the secondhand tanker market, we continue to observe limited number of transactions. Interestingly, a handful of modern tankers built between 2018 and 2020 were reported sold. Highlighting the acquisition from JP Morgan of 2 scrubber fitted sister LR2's, the "Navig8 Providence" 111K/2018 New Times, and the "Navig8 Pride LHZ" 111K/2018 New Times, which were sold for region USD 48 mill each. Also, clients of Norden paid USD 36.5 mill each for 2 x MR2 ships, the ''Eco Los Angeles''-50K/2020 HMD and ''Eco City Of Angels''-50K/2020 HMD.

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