Operators are seizing opportunities to fix kamsarmax bulkers on cheaply priced period contracts while spot rates take a seasonal bath.
Seven vessels have been reported fixed on period contracts over the past week.
On Tuesday, Danish owner-operator Norden reportedly booked Transocean Maritime’s 81,118-dwt Antares (built 2015) for five to seven months at $23,500 per day.
But when the vessel delivers in China on Friday, Norden will be paying around $3,000 per day less than what it might have paid, if had it fixed the ship three weeks ago.
Dry cargo shipbroker Sevi Katemoglou, founder and head of EastGate Shipbrokers in Athens, said the market has seen renewed interest in period tonnage during the past few weeks.
“This seasonally weak period is viewed by many as the right time for a ‘bargain’ deal, which allows an operator to take in a vessel at a reasonable price while at the same time offers a shipowner some much-needed coverage as well as a slight premium over the depressed spot market,” she told TradeWinds.
“That said, we do see resistance in the market still, with some wide bid/offer spreads, while the majority of the period deals that are actually concluded are for short duration, as most shipowners demand significant premium in order to commit their ships to longer periods, which at the moment does not seem achievable.”
Japanese owner Mitsui OSK Lines will be paying just $23,600 per day for a brand-new kamsarmax over the next four to seven months. In comparison, a 2021-built kamsarmax was booked in early January at a daily rate of $27,500 for five to eight months.
MOL reportedly booked the 82,000-dwt BBG Kuantan (built 2022) on Monday for a period contract, which will commence this week when the ship delivers to the charterer in Dalian, China.
The bulker has been under construction at the Cosco Dalian shipyard and is owned by China’s SPDB Financial Leasing, It is managed by BG Shipping of Hong Kong, according to Equasis.
Vessel databases show that the ship was slated for delivery from the yard in March, suggesting that the bulker has been commissioned slightly earlier than scheduled.
‘Bargain deals’
Katemoglou added that some of the enquiry in the period market for kamsarmaxes has been speculative.
“In addition to the usual players that have large portfolios and can utilise period tonnage comfortably, we do see some operators that are putting out period enquiries based on speculation that the dry bulk market will return to its glory days soon enough and in the meantime they will have secured some relatively cheap vessels,” she said.
“This opportunistic approach, however, can prove to be risky especially since, let us not forget, we are still talking hires in excess of $20,000 per day for a standard kamsarmax type.”
Kamsarmaxes are also the flavour of the minute in the sale-and-purchase market, according to Eva Tzima, head of research at Seaborne Shipbrokers in Athens.
“Most fresh [S&P] enquiries are showing increasing appetite for modern kamsarmax/panamax candidates, price ideas for which remain very firm as evidenced by the most recent transactions,” Tzima said this week in a research report.
Past week
Three kamsarmax period deals were reported on Friday alone.
Moundreas Shipping’s 83,617-dwt Pelagos (built 2008) was reported fixed to Speed Logistics of Vietnam for six to nine months at a daily rate of $22,250. The vessel delivered to the charterer in China on 20 January.
Japanese shipowner NS United has reported fixed the 81,896-dwt Loch Long (built 2013) for a year at $24,500 per day, plus scrubber benefit to the charterer, delivering in Japan at the end of this month. The kamsarmax is controlled by MK Centennial Maritime of Singapore.
Similarly, Bahri Bulk of Saudi Arabia was also reported to have fixed out its 80,670-dwt Hessah (built 2020) to an unnamed charterer for five to eight months at $24,500 per day. The ship will deliver in Japan at the end of January.
On Thursday last week, Oldendorff Carriers reportedly fixed SDTR Marine's 81,782-dwt Shandong Fu Ze (built 2017) for a prompt four- to seven-month contract at $23,500 per day.
Oldendorff, the world’s biggest charterer of bulk carriers, took three other kamsarmaxes on short-term charters during the first week of January.
Cobelfret of Belgium booked two others and also extended its charter of a Diana Shipping kamsarmax in early January.
Tuesday was another grim day in the freight derivatives market for panamaxes, with front-month contracts settling over $1,000 lower compared to Monday’s close.
But the physical market remains in contango with paper.
The weighted average of spot rates across the Baltic Exchange's five key panamax routes was assessed on Tuesday at $17,890 per day, which is $229 lower than Monday.
Forward freight agreements for February closed $1,382 lower on Tuesday at $19,022 per day, based on the 5TC panamax contract.
The first-quarter contract settled at $21,008 per day, which is $1,007 lower than on Monday.
The Baltic's forward curve currently implies rates of around $23,000 per day during the second and third quarters of 2022, and of $21,250 per day during the final three months, based on Tuesday's closing prices.
