Crisis in sight? Maritime transport prices of oil, gas and derivatives at a peak
Maritime transport is a rather accurate indicator of future economic trends: a crisis is felt in an anticipated way with a slowdown in international trade, which translates into less transport and therefore also into lower sea freight rates and a drop in their prices. A similar situation is unfolding right now, and in an industry that appears to have skyrocketed in value but, evidently, has grown too much in value. We begin to see what happens and how certain sectors are in difficulty. Now let's move on to the data .
Crude oil tankers
“A bleak result,” said the BRS brokerage of recent tariffs for very large crude oil carriers (VLCCs; oil tankers carrying 2 million barrels). "A terrible start to the year," he said of the tariffs for the Suezmax (oil tankers carrying 1 million barrels).
According to Clarksons Platou Securities, global average spot rates for 10-year VLCCs fell to just $ 800 per day on Wednesday. This is down 90% month-over-month and down 70% on average year-to-date compared to the same period in 2021, to just a snippet of the $ 26,000-a-day break-even rate. ( The valuation for the Middle East-China route has just dropped below zero, to $ -400 a day, which implies that freight does not cover the cost of fuel .) There is too much supply for demand, the China has accumulated a surplus of oil and is not buying it. Excellent deals when, in 2020, the price went to zero or almost zero.
Clarksons priced 10-year Suezmax rates at $ 4,200 per day, down 69% month-over-month, compared to a breakeven of $ 19,000 per day.
Oil tanker owners have been losing money for over a year and the market will have to absorb the insertion of new tonnage in 2022 compared to 2021. There are 44 VLCCs and 39 Suezmax scheduled for delivery this year, compared to 35 VLCCs and 23 Suezmax in the 2021, according to Clarksons.
Tanker for finished products
As with oil tankers, 2022 was a terrible start for tankers. In 2020, many new crude oil tankers were converted to transporting finished petroleum products, clogging the market.
Clarksons has set spot rates for 10-year LR2s (larger product haulers with a capacity of 80,000-119,999 deadweight tons or DWT) at $ 5,200 per day, 71% less month-over-month and 38% lower on average year to date than in the same period in 2021, at less than a third of their break-even rate of $ 18,000 per day.
Rates for the smallest 10-year MRs (25,000-54,999 DWTs) averaged $ 7,900 per day, down 49% month-over-month and 22% below the $ 11,000 break-even rate.
“The second week of the year followed the same pattern as the first. All routes are encountering difficulties, ”Banchero Costa said.
Dry Bulk – bulk products
According to Stifel analyst Ben Nolan, "Solid bulk rates have been in free fall in recent weeks, mainly driven by the large Capesize ships [180,000 DWT], but the weakness has been felt across the board."
Clarksons estimated Wednesday's Capesize spot rate at just $ 10,200 a day, down 55% month-over-month and far below the recent high of $ 87,000 a day in early September (the 10-year breakeven for Capesize. is estimated by Clarksons at $ 17,000 per day). Capesize rates year-to-date are 20% lower than the average for the same period last year. (Capesize because they are the largest bulk ships, which cannot pass through the Panama Canal so they become Cape Horn)
It was a "brutal start to the year" for Capesize , said Fearnleys Research.
Spot rates for Panamax (bulkers with 65,000-90,000 DWT capacity) averaged $ 20,000 per day Wednesday, 9% lower on a monthly basis, while Supramax rates (45,000-60,000 DWT) averaged $ 20,200 per day, 26% off on a monthly basis.
A monthly decline is now expected given the seasonality of dry bulk and, on a positive note, rates in both of these segments are still on average significantly higher year to date compared to the same period in 2021: Panamax by 73%, 94% Supermax.
Liquid Natural Gas LNG Tanks
LNG spot shipping rates have dropped more dramatically in dollar-per-day terms than any other bulk freight shipping segment.
According to Clarksons, spot rates for three-fuel diesel-engined LNG ships (TFDEs) increased to an average of $ 205,000 per day between late November and early December. There have been reports of deals of up to $ 424,000 per day at the peak.
As of Wednesday, Clarksons estimated TFDE carrier spot rates averaged just $ 22,000 per day, down 61% week-over-week and 81% month-over-month, about one-ninth of its starting high. December. The average year-to-date rate is 76% lower than in the same period in 2021. The Liquid Gas Boom is running out after the November boom.
Unlike the dry bulk and tanker markets, however, LNG transportation is primarily a forward charter compared to the spot travel market, so spot fares are less significant. Shipping companies have fewer problems.
Container ship
The only sector that is not crying is that of container ships. Container shipping rates are strongly driven by the consistently high demand from US consumers, which has overwhelmed the transportation supply, creating an extreme congestion situation that seems much stickier for rates than current drivers in other segments of. shipping.
The weekly Shanghai Containerized Freight Index is just below its all-time high. The weekly Drewry World Container Index (WCI) is $ 9,545 per forty-foot equivalent unit, up 12% since early December and 82% year-on-year. The WCI is 3.3 times higher since the beginning of the year than the five-year average for that period . There were a record 106 container ships waiting to dock in Los Angeles / Long Beach on Friday, with 99 on Tuesday. On Friday, Maersk announced fourth quarter 2021 results that once again surpassed its forecasts: earnings before interest, taxes, depreciation and amortization of $ 8 billion, taking its full-year EBITDA to a record $ 8 billion. 24 billion. An exceptional result due to the logistical inefficiency of the USA.
Currently this is the only sector that appears alive, driven by US consumption and a series of traffic jams that will take months to resolve, many months.
For the rest, the situation is clear: the boom in energy supplies is leading to a drop in demand which immediately affects the drop in sea freight rates. The crisis is therefore around the corner for now hidden by the growing US and logistical inefficiencies. But the problems are right in front of us.
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The article Crisis in sight? Maritime transport prices of oil, gas and derivatives at peak comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/crisi-in-vista-prezzi-trasporti-marittimi-di-petrolio-gas-e-derivati-a-picco/ on Fri, 21 Jan 2022 18:36:44 +0000.