S & P

The main news in the market this week is of course the reports surrounding Sanko Steamship. The Japanese operator is understood to be in discussions with owners in the hope of deferring and/or reducing hire payments in an effort to improve it’s balance sheet. We have seen a very active sales policy being adopted by the company in the past 12 to 24 months with the disposal of 20 or so vessels. There is understandably considerable concern regarding the knock on effect Sanko’s troubles may have on a variety of Japanese and ‘foreign’ owners.

In the Panamax sector, two sales reported this week; the M/V SUMMER FORTUNE (69,034 dwt 1997 blt Imabari) sold to Indonesian buyers for region US$ 11m, while the 8 year older M/V SILVER MEI (68,676 dwt 1989 blt Sasebo) at US$ 6.8m to undisclosed buyers.

The box-hold open type M/V SANKO MINERAL (50,757 dwt 2008 blt Oshima) reported sold to Greek buyers at region US$ 21.5m. The Handymax M/V STAR SEA RAINBOW (42,717 dwt 1998 blt IHI) is sold for US$ 11.8m to Greek buyers while the Woodchip carrier M/V GRANDIOSA (42,596 dwt 1986 blt Oshima) reported sold for US$ 3m at auction in Romania where she has been lying for more than a year.

Other sale in Handysize sector include the M/V CHIOS LIBERTY (38,891 dwt 1984 blt IHI) at US$ 3.25m with special survey due and a sister M/V WARRIOR (38,888 dwt 1984 blt IHI) at US$ 3.2m. M/V EXPLORIUS (26,536 dwt 1985 blt Kanasashi) to Syrian buyers at US$ 4.1m; M/V ARABELLA (25,758 dwt 1986 blt Imabari) to Turkish buyers at US$ 3.8m and M/V ALAM GULA (23,418 dwt 1985 blt Uwajima) at US$ 3.15m “as is” basis. 

Whilst the dearth of attractively priced tankers continues to be the major obstacle to any upturn in activity it has still been refreshing to note a slightly more upbeat mood to Owners as the tonnage lists tighten and rates respond accordingly. To be fair this is more so for the crude than the clean sectors but then the larger tanker segments have suffered more than most over the past twelve months and so to see positivity emanating from them is both refreshing and welcome no matter how long it may last. With a summer period imminent it would be naïve to suggest that we are out of the woods especially in light of announcements made this week which remind us that these are still challenging times ahead.

However the fact that the market is still capable of responding so positively to restricted tonnage supply should be reason for us all to feel just that little bit more positive about things going forward. We can report the sale of the MR tanker M/T EBONY (46,938 Dwt 2004 blt 3Maj) - which has been sold on subjects to South American interests at US$ 21.5m and is a little firmer than some may have expected. 

The epoxy coated M/T TAMBOV (40,727 dwt 1996 blt Brodosplit) has obtained US$ 9.8 m and the Tanker Pacific’s M/T PACIFIC RUBY (46,850 dwt 1994 blt Halla) has obtained US$ 7.5m. 

NEWBUILDING 

As we have mentioned in recent weeks, the market has been somewhat subdued this week again and a much lower number of contracts being signed than twelve month ago.

The interesting dynamic we are starting to see this year though is that of the Japanese Yards coming more and more to the fore, not only in terms of design, but also now looking much more competitive commercially. No doubt this week’s news of the Yen dropping to its weakest level against the Dollar in more than 11 months, hitting 84.18 Yen to the Dollar in Asian trade yesterday, will no doubt be of some relief in the short term to the beleaguered Japanese Yards, especially those with berths open in the second half on next year! With the Yen spending most of the second half of last year well below the 80 mark and as such the Yards somewhat holding off their commercial marketing as long as they can, they will no doubt be pleased with the Bank of Japan’s monetary policy to tackle deflation to allow them to take less of a loss when accepting USD denominated contracts today.

The Japanese designs seem to be market leading, especially on the dry bulk side of the business and with Yards becoming more and more willing to open up to foreign owners, rather than the previous insular nature of just dealing with their existing customer or domestic owners. We expect in the coming weeks there will remain more and more discussions taking place and no doubt firm business being concluded, especially as some of these new design concepts offer more than a 30% saving on the current vessels on the water. With fuel consumption one of the biggest concerns of the owners and operators going forward, this massively improved efficiency, if on acceptable commercial terms from the yards will certainly be the good for our market going forward.

In terms of reported business, OSX Acu in Brazil are reported to have taken an order from Clients of Kingfish Do Brasil Navegaco S/A for eleven 45,000 dwt product tankers, backed by Brazilian finance for charter to Petrobras. The Order is reportedly worth some USD 732 Mill, with the Vessels delivering from 2014-2017. Finally the smaller products sector the Turkmenistan Owners “Turkmen Maritime and River Lines” have ordered a singular 7,100 dwt prod/chem tanker with high ice class. Whilst it is understood the Vessel will be delivered in 2015, we are unsure as yet as to the price.