Welcome to BLK Shipping Weekly, our Friday’s update from the shipping market. In this issue, we’ll be covering:
- Wet Cargo
- Dry Cargo
- Containers
- Gas
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Wet Cargo
Charter rates stabilising, pretty much on all trades in view of the demand uplift in June, driven by easing of lockdowns in UK and Europe and roll-out of vaccination programmes in the western countries. These factors are expected to drive energy demand up and cargo with it, increasing the overall demand for tonnage and hold space. With the winter months ahead of us, rates can be expected to start picking up for the rest of the year.
VLCC – rates grew fdue to the positive sentiment given by the possibility of US lifting sanctions on Iran. Outlook: Positive
Suezmax – rates still suffering from the oversupply of tonnage in the market. Relatively stable trend on all routes, with supply and demand nearly balanced. Outlook: Stable
Aframax – relatively stable rates, with demand for hold space still counterbalanced by relatively large supply of tonnage. Outlook: Stable
Dirty Products – stronger rates, primarily driven by the low availability of tonnage ub the Mediterraneand and Baltic. Outlook: Positive
Clean Products – weak to stable rates, owing to the fact that most world refineries are still operating under capacity due to the low demand for refined fuels. With airlines still down and road traffic at a fraction of the pre-pandemic levels the market remains weak. Outlook: Stable
MR – uptake in demand drove rates up, with a positive outlook for the weeks ahead. Outlook: Positive
LR1 – demand for log-range tankers remains low. Slow pick-up is possible depending on the easing of lockdowns and demand for refined products on each side of the Atlantic. Outlook: Stable
LR2 – Tonnage availability declined with a subsequent strengthening of the rates. Outlook: Positive
Handy – Slow pick-up is possible depending on the easing of lockdowns and demand for refined products on each side of the Atlantic. Gloomier in SEA. Outlook: Stable
Dirty Panamax – Rates on the rise, looking positive to the summer, when investors anticipate a further increase of energy requirements from western nations. Further raise driven by reduction in tonnage offering especially in the Mediterranean. Outlook: Positive
Dry Cargo
Capesize – Relatively slow uptake in rate growth, with spot demand weakened slightly in western regions due to summer holidays approaching. Outlook: Stable
Panamax – stable demand does not lead to expect a growth in rates going forward. Tendency to slightly weaken counterbalanced by the hold availability shortage. Outlook: Stable
Supramax – rates climbing steadily over the course of 2021 and stabilised in may with no real surge expected. Outlook: Stable
Handysize – rates climbing steadily WoW, primarily driven by grain, coal and cement trade in the APAC region. Outlook: Positive
Container
Container rates continue with their strong rally on all fronts, although the curve seems to be flattening a little bit. Demand looks strong and will continue to be as western economies get out of lockdowns and people shop around for finished goods, using up the savings gathered during the pandemic.
We’re expecting to see a brake to this trend, however, with the effect of inflation – which is going to off-set the buying craze and put a lid on overall demand.
Apart fo the sharper Feeder 1700 TEU growth of 4% WoW, all other rates seem to be slowing down their rate of growth and we are hopeful we will see the trend reversing before the end of the year.
Outlook: Positive
Gas
Rates for Large Gas Carriers slumped 14% and 21% for 145k and 160k m3 LNGs respectively. Cargo cancellations were the primary causes, resulting in oversupply of carrying capacity in all main routes. Pressurized and semi-pressurized vessel rates remained unchanged.
As plenty of tonnage is currently tied-up in dock for ballast water treatment systems installation, we are to expect a further softening of the rates next month, as the ships come back into the market.
Outlook: Negative
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