As drybulk freight rates remain firm, the ongoing shortage of bulkers is expected to starve an overheated Pakistani market for tonnage. Consequently, one speculative cash buyer tabled an extraordinary price of $495 per LDT for a Capesize bulker last week, in anticipation of a further firming of prices from Gadani.
This is undoubtedly an extremely risky tactic to employ, as the fixing price is about $50 per ldt away from where Gadani levels are for dry units. When markets are positive, speculative offerings in excess of $10 - $20 per LDT are commonplace.
However, this price is definitely not reflective of current rates and could eventually come back to haunt the relevant shipowner and/or cash buyer, closer to the physical delivery of the vessel, GMS said.
Although local steel plate prices enjoyed decent gains over the Christmas and New Year period, how long this trend will last remains to be seen. Meanwhile, the attention of several shipowners has already grabbed, as prices are now on the verge of breaching the $500 per LDT mark - the first time anything close to this level has been seen since early 2015.
We could see the number of viable candidates increases during the early part of 2018 (especially those nearing SS/DDs) in an attempt to capture some of these fantastic numbers on show.
With Pakistan is still closed for tankers, we would urge owners of wet tonnage to curtail their expectations on rates, as the only option for their units remains India or a far more muted Bangladesh, especially for large LDT wet units (Suezmaxes and VLCCs).
Overall, the year has started on a positive note and the prevailing optimism is expected to last at least until the Chinese New Year, GMS said.
Just before, during and just after the holiday period, brokers reported several sales for recycling.
These included the 1994-built Suezmax ‘Vito’ thought sold for $400 per LDT to Bangladesh interests. Another Suezmax, the 1998-built ‘Cap Georges’ was also reported as taken by Bangladesh recyclers for $381.5 per LDT.
The 1999-built Aframax ‘Abul Kalam Azad’ was said to have gone to Indian breakers on the basis of an ‘as is’ sale, while the 1999-built shuttle tanker ‘Navion Marita’ was believed sold on private terms. The 1999-built Panamax crude tanker ‘Sunrise’ was thought sold to Indian breakers.
Indian interests were also thought to have bought the 1999-built MRs ‘Betelgeuse’ and ‘Spica’ for an undisclosed price level, plus the 1991-built Handysize ‘Norte’ for a reported $460 per LDT, illustrating the high levels being paid.