Friday, December 05, 2008
Weberseas WEEKLY MARKET REPORT December 5th, 2008 / Week 49
The BDI lost a further 52 points (around 7%) this week to end at 663. The last time it was at this exact level was
on the 2nd of June 1986. Whilst the BCI increased nearly 4% both the Panamax and the Supramax indices ended
sharply lower as they ended 118 (nearly 19%) and 74 (nearly 12%) respectively.
Despite the above, we are seeing again this week an increase in the S&P activity across all types of bulkers and
we are reporting some interesting deals. In addition, there is a large number of purchase enquiries in the market
and as long as an owner is keen to sell his vessel, it will be sold - young or old.
Chinese banks are injecting billions to support selective s/y in an effort to stop defaults on order that have already
been secured. Rumors of cancellation of n/b orders in the China abound but it is not only the Far East that is
suffering. German shipyards are feeling the effect of the current crisis as many owners consider cancellations.
Out of the 192 total ships on order 25 have already been dropped (around 13% equivalent to nearly USD 900
mill). We understand that upto a quarter of all the ships currently on order face cancellations.
Officially this week Golden Ocean (John Fredriksen's dry bulk company) has stopped it's stake increase in
Navios Maritime Holdings. They recently built up their stake to 5% (in total 5.3 mill shares were acquired at
around USD 48 mill) but the decision has now been taken to stop any further increase in their stake but rather
concentrating on reducing their USD 1.6 bill n/b exposure !!!
The demolition market continues its strong activity and whilst the price for steelscrap has been falling in India
and Bangladesh by around USD 50 and 25 per tonne respectively the rates seem to be holding as cash buyers step
up to secure tonnage. Prices are holding in the mid/high 200's in the Indian sub-continent which is remarkable
given the fact that there is a growing number of vessels seeking demolition. This can only suggest that
speculation in aboundant and we hope that this does not end up with renegotiations on delivery. Perhaps it is
better to go along with a lower price but with a quality scrap buyer rather than selling high and getting
disappointed and frustrated in the end.
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