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Tankers

The tanker market fell last week, and we saw a decrease of approximately (+/-) 25% in all major tankers. The market was driven by a temporary high supply of available tonnage that gave charterers the opportunity to push the price down. We note that a significant number of ships were shut down at the end of last week, which means that access to ships this week will be limited and therefore expect the rates to increase. We are now in the strongest part of the year and expect significantly stronger rates in the time to come. We know that solid one, two and three-year contracts are being signed, confirming the underlying sentiment of a good tanker market. We also notice that ships today`s market seem underpriced, given the historical correlation they have with one-year lease contracts.

Aframax – 12 month TC: $27,250
Aframax – Average spot market rate: $21,536

Bulkers

We saw a slight fall in the rates last week. Panamax fell back about 12% and had an average rate of $12,812. The Capesize segment saw a fall rate of $17,273. We note that the dry bulk market has sailed into rough seas. We saw that both segments were characterised by less demand due to lack of cargo, and this was seen in both the Atlantic and the Pacific. We still expect this to rise from the levels we are currently witnessing. We know that the harvesting of agricultural products from the southern hemisphere is now underway, so we expect an increased influx of raw materials that need shipping that will be reflected in the rates.

Capesize 12 month TC: $19,250
Panamax 12 month TC: $11,875

S&P

Tankers:

A 2002 built Aframax (Imabari SB Saijo) of 107,144 dwt went for the net sum of $14.2m. This is a very strong transaction, and confirms expectations of significantly stronger earnings in the years to come. There was also a 2007 built VLCC (Daewoo) of 306,489 dwt for $41.5m. We noticed that it was initially a $38m transaction, but that the transaction did not materialize and the ship sold at a premium, which also underpins the strong tanker market.

Bulkers:

A 2008 built Panamax (Imabari SB Marugame) of 76,302dwt went for $12.75m. The transaction has noticeably been stronger than similar transactions lately.