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Geopolitics in focus as tanker market remains strong.
Last week concerns grew that Iran may try to block the Strait of Hormuz as tensions between Iran and Israel escalated rapidly following Israel’s strike on an Iranian consulate building in Syria, reportedly housing with key Iranian officials inside. Iran launched a missile and drone strike on Israel over the weekend, which was mostly neutralised. Markets have thus far assessed deescalating tensions following Iran’s attack, which can be positive from the perspective of keeping the Strait of Hormuz open.
“Geopolitics remains in focus, but current dislocations support greater ton-miles”
Ship broker Gibsons focused on the possible tailwind for the Aframax market over the weekend in their latest weekly report, following news that a 350,000 barrels per day Kirkuk-Ceyhan pipeline, linking Northern Iraq to Turkey, may be about to restart. The Iraqi government announced it will begin repairs to the 960km pipeline, which has been rendered out of action since 2014, following ISIS attacks. Iraq expects the pipeline can be operational from the end of April with Gibsons expecting the reopen to be later in Q2. Either way, reopening of the pipeline will support demand for Aframax vessels in the Mediterranean.
Aframax ECO, 12 months TC
Aframax, Average spot
Suezmax ECO, 12 months TC
Suezmax, Average spot
Source: Clarksons Research
Capesize rates remain volatile, but gain week-on-week.
Capesize rates gained in both the Atlantic and Pacific, with both basins experiencing a steady flow of fresh enquiry. Overall, fleet-weighted capesize earnings jumped as much as 25% week-on-week according to Clarksons Research, now holding at around the average level for 2024.
“Bulkcarrier markets remain active, second-hand values up 8% YTD – Clarksons Research”
Panamax and handy rates held mostly steady last week. Panamax rates saw some downwards pressure from weaker US coal exports, which may be linked to the Baltimore bridge collapse. Overall activities levels were not impressive, but optimism built throughout the week in both the Atlantic and Pacific. Handy markets similarly saw weaker demand from coal, but instead from the Pacific. Demand was somewhat weak in the Atlantic, but reduced vessels operating in the region was sufficient to support stable rates.
Capesize, 12 months TC
Kamsarmax, 12 months TC
Source: Clarksons Research
Global car trade back above 2019 levels and with greater car-miles.
Clarksons Research focused on “firmer than ever” PCTC markets in a recent article. Global ‘deep-sea’ car trade has recovered remarkably since Covid-19, currently standing approximately 15% above 2019 levels from a volume perspective. However, alongside total volume growth the market has also shifted at an unprecedented pace, with the rapid growth of electric vehicles (EVs), and the boom in Chinese production capacity, strengthening East-to-West trade and growing car-miles in the process. Clarksons Research now estimate that car-mile trade is an impressive 23% above pre-Covid levels. Greater car-miles are also supported by avoidance of the Red Sea (previously around 20% of all car trade), and the closure of the Port of Baltimore (previously around 4% global import volumes).
5000 CEU – 12 months TC
6500 CEU – 12 months TC
Source: Clarksons Research
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| Handysize |
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