The last week’s development in the freight market has been long-awaited amongst the owners, but it is very inconvenient for several of the tenants who have not yet met their long-term vessel needs. It is mentioned that Shell, which normally has upwards 150 vessels on long-term contracts, now just have in excess of 30 vessels.
They are not the only tenants who were hoping that the rates would stay low for longer. Therefore we have seen a shift in the last couple of weeks, where companies actively have contacted shipowners with the wish to bind vessels on contracts. We therefore expect the prices on long-term contracts to increase going forward, as the spot rates increase.
Last week the average rate increased further in the spot market and shipbrokers are now raising the estimate for future earnings.
The greek shipbroker Allied Shipping has raised its price estimates on 12-month TC-contracts for Aframax with 12% the last month to $16.000 per day. If the spot market maintains todays´ levels, these will most likely increase further.
Aframax 12 months charter rate: $16.000 per day
Average rate in the spot market: $33.600 per day
Baltic Dry Index fell 3,6% last week and closed at 1.519 points.
The rates for Panamax fell 10,8% to $12.682 per day. We are now in a historical quiet period, where the development usually turns, closer to December. Although we do not expect any major fall in rates in the future, as the demand seems to protect from a downturn. Increasing rates for Capesize also contributes to keeping the smaller vessels´ rates on acceptable levels.
Capesize 12 months charter rate: $21.500 per day
Panamax 12 months charter rate: $13.500 per day
A number of transactions were reported in the tanker market, with both VLCC and MR vessels attracting a lot of interest.
In the dry bulk market, a number of Capesize and Panamax vessels was traded. A Japanese build Kamsarmax from 2010 was also traded for $19,5 million.