The opening week of 2018 brought with it, a healthy collection of
fireworks and some truly extraordinary and downright baffling sales, as
Cash Buyer speculation ramps even further into overdrive and another
potentially bullish quarter lies ahead in wait.
As dry bulk freight rates remain firm, the ongoing shortage of bulkers
is expected to starve an overheated Pakistani market for tonnage.
Consequently, one speculative Cash Buyer tabled an extraordinary
price of USD 495/LT LDT for a Capesize bulker this week, in
anticipation of a further firming of prices from Gadani.
This is undoubtedly an extremely risky tactic to employ as the fixing
price is about USD 50/LDT away from where Gadani levels currently stand
for dry units. When markets are positive, speculative offerings in
excess of USD 10 - 20/LDT are commonplace. However, this price is
definitely not reflective of current rates and could eventually come
back to haunt the relevant Ship Owner and / or Cash Buyer, closer to
physical delivery of the vessel.
Although local steel plate prices have enjoyed decent gains over the
Christmas and New Year period, how long this trend will last remains to
be seen. After all, what goes up eventually comes down! Meanwhile, the
attention of several Ship Owners has already perked as prices are now on
the verge of breaching the USD 500/LDT mark - the first time anything
close to this level has been seen since early 2015. As such, it could be
that the number of viable candidates increases during the early part of
2018 (especially those nearing SS / DDs) in an attempt to capture some
of these fantastic numbers on show.
With Pakistan still closed for tankers, we would urge Owners of wet
tonnage to curtail their expectations on rates as the only option for
their units remains India or a far more muted Bangladesh, especially for
large LDT wet units (Suezmax tankers and VLCCs). Overall, the year has
started on a positive note and the prevailing optimism is expected to
last at least until the Chinese New Year.
For week 1 of 2018, GMS demo rankings / pricing for the week are as below.
|Demo Rank||Location||Sentiment||Dry Bulk||Containers||Tankers|
|1||Pakistan||Improving||USD 430 / LT||USD 450 / LT||N/A|
|2||India||Improving||USD 420 / LT||USD 440 / LT||USD 430 / LT|
|3||Bangladesh||Improving||USD 410/LT||USD 440 / LT||USD 430 / LT|
|4||Turkey||Improving||USD 290/ MT||USD 290 / MT||USD 300 / MT|
|5||China||Weak||USD 210/LT||USD 230 / MT||USD 230 / MT|