Tank
Last week the market was calmer, but freight rates continued to climb. It was mainly VlCC og Suezmax that saw higher rates and some links for Aframax. The average for Aframax retreated somewhat, but remained at a solid level above $30,000 per day.
Aframax rental rate for 12 months: $16,500 per day
Average market rate: $31,300 per day
Dry Bulk
The Baltic Dry Index fell 4.1% last week and closed at 1.457 points. Panamax rates fell 3.3% to $12,263 per day. The recent decline is due to seasonal demand, which is expected to change positively in a short period of time. It is also positive to see that the average rates for Panamax in 2018 are almost 19% compared to the average of last year ($11,639 compared to $9,79).
Capesize rental rate for 12 months: $20,000 per day
Panamax rental rate 12 months: $13,500 per day
S&P
Used market activity has been strong over the past two weeks and we are seeing a clear upward trend in earnings.
Last week, two Aframaxes were traded in a “block swap” for $24.3 million. The ships are 2003 and 2004 models, both built in Korea. One of the ships has just completed its “special investigation”, while the others will have to dock in the next 6 to 8 months. We believe the values for this transaction reflect a rebound from previous ones, especially since “block trades” typically result in a discount as ships are sold together.
In the dry goods sector, a 2012 Kamsarmax traded for $21 million. This is one of the few transactions to have taken place recently. Clearly, sellers are unwilling to lower prices based on falling short-term earnings. Rising rates towards the end of the year should stimulate more transactions.
