Ship repairs proving costlier and more difficult scheduling-wise
Performing scheduled maintenance or ship repairs is proving to be yet another challenge these days, in the aftermath of the war in Ukraine. In its latest weekly report, shipbroker said that “while observing the ship repair market since the beginning of the year, uncertainty remains part of the daily challenges owners must encounter for repairing their fleet. Nowadays not only the ongoing unprecedented effect of the pandemic is heavily affecting the ship repair market but also the shock of the long-lasting war between Russia and Ukraine”.
According to the shipbroker’s specialized department, Interyads, “starting with the effect of the war, we noticed a massive change in the itinerary of tankers and LNGCs vessels, putting a lot more pressure on the repair facilities in Europe, Mediterranean and Black Sea areas.
FBX index may: looking forward
The Asia outbound market had seen a decline throughout April, largely driven by the shutdown of several sections of China following COVID outbreaks and strict anti-COVID measures. Anecdotally at least, output has dropped between 40-80 percent with China manufacturing output dropping to its lowest level in two years (official PMI). Whilst this decline has been fairly progressive on the Asia-Europe and Asia-Mediterrenean routes, movements on the Asia-US West Coast and East Coast indexes have been characteristically violent. FBX01 China/East Asia to North America West Coast dropped $376/FEU from 1 to 28 April and then sharply dropped $1,547/FEU in one day from 28-29 April. On the Asia-US routes, rates on the front of the curve have maintained the movement on spot. However, firm offering midway through April lifted values up and flattened the forward curve – market value for Q4(22) increasing from $10,250/FEU on 1 April to $12,000 on 28 April.
Product tankers: growth of refining activity expected to support freight rate market
An expected boost of refining activity across the globe is expected to boost demand for product tankers in the coming months. In its latest weekly report, shipbroker said that “in recent weeks, headline refining margins have surged to record levels, whilst clean tanker rates have also tested or exceeded previous records depending on the region/route. Rates remain volatile and with the International Energy Agency predicting that global refining runs will surge by 4.4 million b/d from April to August this year, owners have good reason to be optimistic in the short term. Yet, oil demand is torn between a post covid recovery and the economic fallout of the war in Ukraine, the reallocation of trade due to Russian sanctions/self-sanctioning and China’s zero covid policy. All these factors complicate the outlook, with downside risk on the horizon. However, with the invasion redefining oil trade, the refining landscape faces its own redefinition which will impact the product carrier market for years to come”.
Dry bulk market: capesizes on higher ground
The Capesize market has made the most of the short working week as rates have lifted strongly, with the 5TC now residing at $24,002 – up $6262 week on week. The positive market sentiment was largely Pacific led yet that didn’t stop the Atlantic Basin and ballaster trades from getting in on the act, as all regions posted big gains. Cargo levels in the north Atlantic are heard to be poor yet a wide range of rate levels have been mentioned as the market struggles for visibility in the region as usual. The Transatlantic C8 now sits discounted at $17,200 to the Ballaster C14 at $22,018, while the Transpacific commands a premium at $27,754. A big mover and the focus of much market attention is the Backhaul C16 at $18,475, currently pricing above the Transatlantic C8. Coal flows continue to be strong, boosting this feeder route into Europe largely due to the current geopolitical situation. The Capesize market flow remains anything but normal currently as premium and discount routes appear to be swinging and unstable.
Trading prices and leasing rates decline for second-hand containers
The latest container logistics report issued by Container xChange, a marketplace and technology infrastructure provider for container logistics companies, indicates a decline in average prices for second-hand containers. The report also shows a decline in average one-way pickup charges for containers Ex China to Europe North, Europe Med, Northeast Asia and the Middle East and Indian Sub-continent (ISC).
While pick-up charges for a 40HC and 20DC from China to these regions increased in March, they have declined in April, with prices at $2,930, and $1,200 respectively.
S&P activity rising, as newbuilding orders stall
Ship owners have turned to second hand ships over the past couple of weeks. In its latest weekly report, shipbroker said that “shipbuilding activity was started off at a relatively sluggish pace at the beginning of this 2 week period as the situation in Shanghai had significantly reduced demand negatively influenced the overall mood and appetite for new orders. Yet since that point we have managed to see the market regain part of its momentum over the past week. The situation in China has frozen both construction procedures of ships under order and the logistics of raw materials which should cause delays in both the deliveries of newbuildings as well as the contracting of any new orders that were in the works. Shanghai’s lockdowns and port congestions combined with the energy dispute between Russia and Europe, have created an unclear landscape for large investment decisions moving forward, while the instability of the global economy could push for more of a wait and see strategy to take hold in the market.