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Market Chat: Week 42

3 min read

Handysize values moving up in October

Handysize values have increased this month across most ages, following a period of decline. Values for generic 10 year old Handysizes have moved up by c.2% since the start of October to USD 16.70 mil.

Interest in the Handysize sector has led Bulker sale and purchase activity since the start of the month. 10 sales recorded so far in October, accounting for 30% of all Bulker transactions. Figure 1 shows the number of Bulkers sold by vessel type and the total spent in USD mil.

Figure 1: Bulker types sold in 2022 by number of vessels and total spent (USD mil).

Sentiment remains firm for this sector. Although rates have fallen from the highs seen earlier this year, they remain above average, with period rates for Handysizes continuing to outperform their larger counterparts. Spot rates for Handysizes are currently at 17,269 USD/day, compared to just 16,883 USD/day for a Capesize. Figure 2 shows the Bulker spot rates for each vessel type by earnings per day.

Figure 2: Spot rates by earnings per day for Bulker vessel types.

Notable sales include the Lodestar Pacific (33,400 DWT, March 2015, Shin Kochi) which sold for USD 19 mil to Evalend Shipping of Greece, VV value USD 18.65 mil. The Grikos (30,400 DWT, Jun 2006, Shikoku) sold to Greek buyers for 12.5 mil, VV value USD 11.5 mil.

LNG values skyrocket  

LNG values have received a boost as earnings skyrocket once again, surpassing last year’s record breaking peak and rates have yet to reach a ceiling. At the time of writing, timecharter rates were at 440,927 USD/day according to the Baltic Exchange. High demand for LNG vessels, due to the energy demand and the conflict in Ukraine that cannot be met, combined with low fleet supply, has sent freight rates sky high.

As a result, LNG values have continued on their upward trajectory, with newbuilding prices for large LNG carriers up 20% year on year from USD 203.79 mil to USD 244.88 mil. As a result, the number of newbuilding orders placed is up c.92% from last year at 142 orders. Some of the main market participants have been MOL, NYK Line, Global Meridian and Knutsen OAS, ordering up to 15 vessels each so far this year.

Figure 3: Newbuilding values of LNG vessels (USD mil).

Notable newbuilding orders this month include an en bloc order from Venture Global LNG for two 200,000 CBM vessels, scheduled to be built at Daewoo and delivered in 2026, contracted for USD 250 mil each.

TMS Cardiff Gas also added a further order to their newbuilding list for a Large LNG carrier of 174,000 CMB. This vessel is scheduled to be built at Hyundai Samho and delivered in 2026, contracted for USD 246.97 mil, VV value USD 246.35 mil.

VesselsValue data as of October 2022.

Disclaimer: The purpose of this blog is to provide general information and not to provide advice or guidance in relation to particular circumstances. Readers should not make decisions in reliance on any statement or opinion contained in this blog.

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