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.
Source:
steel
guru. 09 Jan 2018
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