The week in charts: Russia’s bulk exports to Europe drop 60% | Boxship recycling dominated by feeder ships | US-sanctioned ships don’t lose flag for long
Lloyd’s List weekly showing of the data and figures behind our news, analysis and markets coverage
Over 100 falsely flagged ships are trading in plain sight, prices of over $600 per light displacement tonne are now regularly being offered for recycling candidates and charter rate premiums for eco boxships increasing
RUSSIAN bulk commodity exports to Europe have declined about 60% amid sanctions for the Kremlin’s war in Ukraine, writes senior markets reporter Nidaa Bakhsh.
Trade with continental Europe has fallen to 16.6m tonnes in the past 12 months, which comprises the post-war period, compared with 41.6m tonnes in the year-earlier period, according to Oceanbolt commodity-tracking data.
Much of the decline comes from coal trades, which were sanctioned by the European Union in August.
Bulk carriers sailing to 21 European countries straight after departing Russia fell 45% to 506 between March and December, compared with 921 in the year-earlier pre-invasion period, according to Lloyd’s List Intelligence data.
Boxship recycling still dominated by feeder ships
A flood of ageing containerships being consigned to shipbreaking yards has failed to materialise as boxship charter rates and demand for vessel capacity have been more positive than anticipated, writes data reporter Rob Willmington.
While the demolition of smaller ships has certainly picked up since last year, which saw the lowest levels of containership recycling in two decades, larger vessels should be expected to start appearing on brokers’ demolition sales lists later this year.
US-sanctioned ships don’t lose flag for long
Vessels sanctioned by the US have been able to maintain their flag or reflag with other registries, according to an analysis of data from the US Office of Foreign Asset control and Lloyd’s List Intelligence.
Be it due to lax due diligence by registries, lack of enforcement, or both, it illustrates that sanctions do not necessarily raise cumbersome obstacles for ships to acquire a mandatory service such as flag registration, allowing ships to hop from one flag to the other and potentially resume commercial activities, writes senior reporter Tomer Raanan.
Excluding fishing vessels, the US imposed sanctions on 96 commercial ships last year, of which 37 were more than 10,000 dwt. Of those larger vessels, 11 have since changed their flags post-sanctioning, while flags of four ships are unknown.
Over 100 falsely flagged ships are trading in plain sight
A growing fleet of ships using fraudulent certificates issued by fake flag registries, often broadcasting falsified Automatic Identification System data, is trading internationally with almost no oversight and a limited range of enforcement tools to stop them, writes editor Richard Meade.
According to the International Maritime Organization’s database, 110 vessels are currently “falsely flagged”, meaning they are either trading using flag that has not registered the vessel or one of a growing number of entirely fictitious and fraudulent flag registries.
Eighth capesize bulker sold for recycling
Rising ship recycling prices have recently persuaded owners of ageing capesize bulkers to commit ships for scrap, although recent freight rates improvements could stem the flow, writes data reporter Rob Willmington.
Since January, a total of eight capesize units have been sold for recycling compared with 14 vessels demolished in the whole of 2022.
“Price levels close to and even more than $600 per ldt are now being regularly presented on various vessels and this is inducing more shipowners to sell their vessels,” said cash buyer GMS.
Türkiye ramps up Russian oil imports post EU ban
Turkish crude oil and refined product imports from Russia rose in February, as Russia lost a key market for its refined products following the European Union ban that came into force earlier that month, writes sustainability editor Enes Tunagur.
Firmer Turkish demand has pushed Russian crude prices towards the $60 per barrel price cap, as the country may compete with China and India for Russian barrels, according to broker BRS.
Türkiye’s diesel imports from Russia reached a record high in the past month, as buyers likely took advantage of discounted prices following the EU embargo.
Charter rate premiums for eco boxships increasing
Charter rate premiums for so-called eco containerships are widening, with modern feedermax units presently commanding rates more than 20% higher than for older tonnage, writes data reporter Rob Willmington.
Eco containerships, which are fitted with flexible two-stroke main engines that can operate efficiently at a variety of service speeds, are becoming increasingly sought by charterers following the requirement to report carbon intensity indicator data since the beginning of this year.
According to Braemar data, 2,500 teu capacity eco feedermax units are currently achieving charter rates that are 22% more than older ships, while 1,700 teu eco regional feeder ships can now command a rate premium of up to 18%.
Singapore bunker sales fell to eight-month low in February
Marine fuel sales in Singapore dropped to the lowest in eight months in February on the back of lower vessel calls at the world’s largest bunkering hub, writes sustainability editor Enes Tunagur.
Bunker fuel sales in Singapore fell by 13% on the month to 3.79m tonnes, marking the lowest level since June in the past year, according to preliminary figures from Singapore’s port authority. The biggest drop was recorded in very-low sulphur fuel oil sales, which dipped by 16% month on month to 2.3m tonnes. The 0.5% sulphur product accounted for 51% of total sales last month, compared with 52% in January.
Capesizes back to profit-making territory
Capesize spot rates burst through the loss-making territory last week to the highest level this year as optimism regarding Chinese demand prospects filters through, writes senior markets reporter Nidaa Bakhsh.
The average weighted time charter closed at $17,500 per day on the Baltic Exchange on March 14. The gain is 679% since a multi-month low of $2,246 on February 17.
“The fundamental backdrop remains the same, with firmer Chinese steel prices driving iron ore import demand higher leading to a notable rise in long-haul Brazil volumes,” US investment bank Jefferies said in a note.
Container demand fall will spark service modifications
Deep year-on-year declines from the peak of pandemic-driven demand for container shipping are projected to remain for at least the first half of 2023, with carriers now needing to take further decisions over capacity management to prevent a further rates rout, writes container shipping editor James Baker.
Recent figures from CTS show the transpacific and Asia-Europe trades have seen falls of 24% and 18% since September, while in the US data from the National Retail Federation indicated there would be only modest gains in demand before June.
Bulk carrier values climb as positive market sentiment returns
Asset values of bulk carriers have been on the rise recently, following declines from the final quarter of 2022, as positive sentiment in dry cargo freight markets has returned, writes data reporter Rob Willmington.
Average asset values of capesize bulkers of all ages have increased by some 5% since mid-February, with 10-year-old units valued at around $31m, while values of panamax bulkers of the same age have risen by 9% and are presently around $22m.
At the same time, prices of five-year-old supramax and handysize units have both increased by 4%, to around $30m and $26m, respectively.
VLCC rates climb on firm activity
Spot rates for very large crude carriers have surged last week as activity firmed, with some routes blazing at close to $100,000 per day.
Demand from China is said to be the main market driver amid increased exports reported from the US as well as expectations of an uptick from the Middle East, writes senior markets reporter Nidaa Bakhsh.
The average weighted time charter closed at $71,234 per day on March 9, according to the Baltic Exchange, the highest since November.