[xclusiv] S&P Report 20th November 2023


Market Commentary:

On Friday 17th November 2023, BPI hit 1,874 points and the weighted average of the 5 T/C routes reached USD 16,868. The Panamax index hasn’t seen these levels since 27th October 2022, when the index stood at 1,900 points. The BPI has increased about 30% the last 10 days in order to reach almost a 11 months high. The route Skaw-Gibraltar Transantlantic round voyage, has significantly boosted the BPI as it has increased around 60% the last 10 days to USD 22,975 per day, and almost 250% since 25th July 2023. The Japan-South Korea Transpasific round voyage and the South China, Indonesian round voyage which stand at USD 13,704 per day and USD 13,628 per day, have also given strong support to Panamax rates. Their increase since 25th July, when their rates were around USD 6,250 per day, is around 120% each and, they have seen their numbers moving about 20% and 18% higher the last 10 days. North Atlantic and Pacific routes are definitely “on the move”, with high demand for Panamaxes, while the tonnage supply is quite tight. The commodity volumes waiting for transfer are in healthy levels. Grain exports from the USA are increased due to a very good harvest. Also, coal imports from Asian countries are increased due to the low coal price and stock refilling. Iron ore demand is stable but with a positive outlook, as Beijing has stated it would accelerate the issuance of bonds after accommodating for an additional CNY 1 trillion in debt to target steel-heavy infrastructure and manufacturing projects. These fundamentals create an optimism in the market, with charterers and owners believing that improved rates will be maintained until the end of the year. Moving to the other indices, the BDI closed the week at 1,820 points mark, up by 10.77% and BCI closed the week at 2,763 points, up by 6.72%. In the smaller vessels the BSI is at 1,205 points, up by 7.11% week on week while BHSI stands at 599 points, up by just 0.84% on a weekly basis.

On the wet market, this week’s highlight was the International Energy Agency’s monthly oil report. The IEA raised its estimates for oil demand and supply growth in 2023 by 100,000 b/d and 200,000 b/d respectively based on increased Chinese demand (in September China’s oil demand reached an all-time high above 17 million b/d) and strong US and Brazil production. For 2024, there are predictions for a demand growth mainly from non-OECD countries, while the global supply is estimated to increase by 1.6 million b/d, 100,000 b/d less than 2023 estimations. The oil market seems to be in surplus in the first quarter of 2024 despite the 900,000 b/d less production from OPEC+ group. Furthermore, BDTI closed the week with a decrease of 5.4%, at 1,317 points and BCTI closed the week with an increase 5.1% at 826 points mark. The dirty market index is having a correction with a series of 10 negative closings, following the record number of 38 consecutives positive days. On the other side, the clean market index is keeping the mild upward trend that started in 18 July 2023, when it hit 563 points, the lowest mark since late January 2022.

As days go by, COP28 is getting closer. It will be held in Dubai from 30 November until 12 December 2023. This year the Conference will focus on four main areas. One is the transition to clean energy, how to achieve it and how to slash emissions before 2030 to limit global warming to 1.5° C (2.7° F) above pre-industrial levels. Another is nature, people, lives & livehoods, putting these at the heart of climate action, including helping the most vulnerable communities adapt to the change that’s already occurring. Third is financing and setting the framework for the green finance to be affordable, available, and accessible to developing countries. Last is mobilizing inclusivity, ensuring that decisions, discussions and solutions are implemented, are truly inclusive and done in collaboration with the local communities. Shipping industry has significant interest in this year COP28, especially for decisions on the transition to clean energy and the green finance, with latest example the GasLog’s USD 2.8 bn sustainable refinancing deal, which is tied to carbon emissions and female representation in the company’s cadetship programme as key performance indicators. 

Sale and Purchase:

Another active week for the Capesize sector, with the “Frontier Brilliance” – 181K/2013 Imabari being sold for USD 31 mills to Chinese buyers. Furthermore, on the same sector, clients of NGM acquired the “Honor” – 179K/2011 HHI and the “Glory”- 179K/2011 HHI for USD 49.5 mills enbloc. On the Kamsarmax sector, the Ice Class 1C “Nord Beluga” – 82K/2015 Oshima sold for region/ high USD 27 mills to Greek buyers. Greeks also acquired the Ultramax “Star Athena”- 63K/2015 Chengxi for USD 23.6 mills, while the Supramax “Navdhenu Purna”- 53K/2005 Imabari was sold for USD 8.5 mills to Chinese buyers. Last but not least, Turkish buyers acquired the Handysize “Ijssel Confidence” – 38K/2012 Imabari for USD 16.5 mills, while the “Lord Nelson” – 29K/2005 Shin Kochi was also sold for USD 7.9 mills to Turkish buyers.

On the tanker S&P activity, the Aframax “Iridescent”- 113K/2009 New Times was sold for high USD 39 mills. Performance Shipping announced the sale of Aframax “P. Kikuma” – 116K/2007 Samsung for USD 39.3 mills basis delivery within December 2023. 2x separate Chinese buyers acquired the StSt Chemical “Gion Trader” – 20K/2015 Usuki and the StSt “Albatross Trader” – 20K/2015 Usuki for USD 30 mills each.


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